Regulators on Sunday announced the closure of the cryptocurrency-friendly Signature Bank in New York and promised to reimburse investors. The shutdown of Signature Bank follows the Friday closing of Silicon Valley Bank. On Monday, customers of both tech-friendly banks will have access to the funds that the US Government, Federal Reserve, and Financial Deposit Insurance Corporation are providing as a bailout.
Depositors of Silicon Valley Bank will be “completely” shielded from financial losses, which are typically assured by the FDIC only up to $250,000, according to a joint statement issued Sunday by the regulating agencies.
The Federal Deposit Insurance Corporation (FDIC) was named administrator by New York financial authorities with the intention of selling the bank’s assets at a later date. On March 8 Signature Bank recorded $89.17 billion in bank assets. New York’s Department of Financial Services reports that as of December 31st, it had about $110.36 billion in assets.
The Federal Deposit Insurance Corporation (FDIC) established a “bridge” replacement bank to Signature on Sunday. This will allow consumers to access their money beginning on Monday. According to the FDIC, consumers of Signature Bank, including shareholders and creditors, will automatically become customers of the bridge bank. Greg Carmichael, a former chief executive officer of Fifth Third Bancorp, was selected to serve as chief executive officer of the bridge bank by the regulatory agency.
The failure of Signature came on the heels of the closure of Silicon Valley Bank on Friday, which was the biggest failure since the collapse of Washington Mutual in 2008 during the financial crisis. The collapse of Washington Mutual remains the biggest bank in the history of the United States.
On Sunday, the Vice President of the United States, Joe Biden, made a commitment to hold “fully accountable” those individuals who were responsible for the collapse of two different financial institutions, Silicon Valley Bank and Signature Bank. On the other hand, he tried to convince people in the United States that their accounts are secure.
I’m firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.
— President Biden (@POTUS) March 13, 2023
I’ll have more to say on this tomorrow morning.
In light of the collapses of Silicon Valley Bank and Signature Bank, President Joe Biden has indicated that he plans to address the topic of the financial system in the United States on Monday morning.
