Signature Bank Has To Close Due To Fear Of The Fall Of Silicon Valley Banks
- In a joint statement, the FDIC announced the closure of Signature Bank amid the collapse of Silicon Valley banks.
- Earlier, Signature said it was in a well-diversified financial position and had limited digital asset-related deposit balances due to industry developments.
- All Signature Bank depositors who pay taxes in full will be refunded as required by law without incurring any loss.
Following the failure of California’s Silicon Valley Bank, federal officials announced on Sunday that New York’s Signature Bank had been shut down to safeguard consumers and the financial system.
According to Fox Business, the announcement was made in a joint statement from the U.S. Department of the Treasury, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC).
As U.S. officials fear the collapse of Silicon Valley Bank, they say a similar program has been issued for Signature Bank, which was shut down on Sunday by the Federal Reserve state regulations.
Bank officials say Signature Bank depositors will have access to their money.
“All Signature Bank depositors will be fully refunded. As with the solution for Silicon Valley Bank, taxpayers will not suffer any damage,”The U.S. official said.
This is one of the efforts to prevent the crisis from spreading.
“This step will ensure that the U.S. banking system continues to perform its vital roles of protecting and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.”
Signature Bank in New York, a key bank in the cryptocurrency industry, provided deposit services for customers’ digital assets but did not make loans collateralized by them.
The bank also said last Thursday that it is in a well-diversified financial position and has limited digital asset-related deposit balances due to industry developments.
“We want to make it clear again that Signature Bank is a well-diversified, full-service commercial bank with more than two decades of history and solid performance serving middle market businesses,”Joseph J. DePaolo, Signature Bank Co-founder and Chief Executive Officer, said in a statement.
Silicon Valley Bank, the 16th largest bank in the country, filed for bankruptcy on Friday after depositors flocked to withdraw money this week due to concerns about the stability of the banks, which is directly related to the closure of Signature. The demise of Washington Mutual in 2008, was the second-largest bank failure in U.S. history.
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