US regulators shutter New York’s Signature Bank following SVB collapse
New York’s Signature Bank has been shuttered by US regulators as the banking sector looks to see off a domino effect following the closure of Silicon Valley Bank (SVB).
The US Treasury takes action to shore up banking sector
In a joint statement, Treasury secretary Janet Yellen, Federal Reserve board chair Jerome Powell, and Federal Deposit Insurance Corporation (FDIC) chair Martin Gruenberg outlined how they are taking “decisive action” to strengthen confidence in the banking system.
As well as confirming that the FDIC has protected all deposits in Silicon Valley Bank, the group announced a similar “systemic risk exception” for Signature Bank. “All depositors of this institution will be made whole,” the statement reads.
However, shareholders and some unsecured debtholders will not be protected, while senior management has been axed.
Signature Bank is a large lender in the cryptosphere, reportedly only second to Silvergate Bank, which itself is currently undergoing liquidation.
At the end of 2022, Signature had $110.4 billion in total assets and $88.6 billion in total deposits, according to a securities filing.
Funds for both Signature and SVB can be withdrawn beginning Monday 13 March, with no costs borne by the US taxpayer.
Yellen, Powell, and Gruenberg add that the US banking system remains “resilient and on a solid foundation”, thanks in no small part to post-2008 reforms.
“Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.”
