On the weekend, Silicon Valley Bank was forced to close after a bank run saw depositors rush to withdraw their funds all at once.
Today, it was announced that New York-based Signature Bank has also been forced to shut its doors.
The collapse of Signature marks the third significant bank failure within a week. Silvergate, a California-based bank that made loans to cryptocurrency companies, announced last Wednesday that it would cease operations and liquidate its assets.
“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority,” Treasury, Federal Reserve, and FDIC said in a joint statement.
Signature Bank was a New York-based full-service commercial bank with 40 private client offices throughout New York, Connecticut, California, Nevada, and North Carolina. Signature Bank’s specialty finance subsidiary, Signature Financial LLC, provides equipment finance and leasing
Signature Bank’s latest filings show it had US$110.4 billion in total assets and US$88.6 billion in total deposits.
According to news outlet CNBC, the bank was a favorite among the cryptocurrency industry.
The US Fed and Treasury today announced a massive program to safeguard investors’ money at the two banks, which will be paid out in full.
“This step will ensure that the US banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth,” the agencies said in a joint statement.
Amid the wreckage, the Fed also announced that it would set up an emergency lending program, with approval from the Treasury, to funnel funding to eligible banks and help ensure that they are able to “meet the needs of all their depositors.”
However, shareholders in the banks will be left empty handed, with no government bailout.
Related
Source: Vietnam Insider