Signature Bank, a New York bank, was also closed by regulators over the weekend. Signature depositors will also be made whole.
New York: A day after the Silicon Valley Bank witnessed a downfall, New York-based Signature Bank was closed by the state’s financial regulators on Sunday as the fallout from last week’s implosion of SVB Financial Group’s Silicon Valley Bank spreads to other lenders.
As per a Reuters report, the Federal Deposit Insurance Corporation (FDIC) took control of Signature, which had $110.36 billion in assets and $88.59 in deposits at the end of last year, according to New York state’s Department of Financial Services.
Issuing a joint statement, financial agencies including the US Treasury said SVB depositors would have access to “all of their money” starting Monday, March 13, and that American taxpayers will not have to foot the bill.
The US Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and Treasury said depositors in Signature Bank, a New York-based regional-size lender with significant cryptocurrency exposure which was shuttered on Sunday after its stock price tanked, would also be “made whole.”
And in a potentially major development, the Fed announced it would make extra funding available to banks to help them meet the needs of depositors, which would include withdrawals.
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“We are taking decisive actions to protect the US economy by strengthening public confidence in our banking system,” the agencies said in their joint statement.
“The US banking system remains resilient and on a solid foundation,” due in large part due to reforms undertaken after the financial crisis of 2008 that introduced new safeguards for the banking industry.
“Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.”
(With Inputs from Agencies)
