New York-based Signature Bank was shut down by government regulators in the US on Sunday. This is the third largest failure in US banking history, two days after the closure of Silicon Valley Bank (SVB).
The Federal Deposit Insurance Corporation (FDIC) takes over control of the signature. At the end of last year, Signature had $110.36 billion in assets and $88.59 billion in deposits, according to the New York Department of Financial Services.
The US Treasury Department and other bank regulators have said in a joint statement that all depositors of Signature Bank and SVB will be taken care of and taxpayers will not suffer any loss.
SVB was closed on Friday. Investors panicked over the speedy withdrawals by customers from the 16th largest bank in the US and started selling off the shares. The market value of US banking stocks declined by more than $100 billion last week.
The FDIC on Sunday formed a ‘bridge’ successor bank to enable customers to access their money as quickly as possible. The FDIC has said that Signature Bank’s depositors and borrowers will automatically become Bridge Bank’s customers.
The regulator has named Greg Carmichael, former chief executive officer of Fifth Third Bancorp, as the CEO of the bridge bank. US officials said on Sunday that customers of the Silicon Valley bank would be able to access their money from Monday.
Signature was a commercial bank and had private client offices in New York, Connecticut, California, Nevada and North Carolina. As of September, nearly a quarter of its deposits came from the cryptocurrency sector, but in December the bank announced it would reduce its crypto-related deposits by up to $8 billion.
