Signature Bank was closed by New York state financial regulators on Sunday as the fallout from last week’s implosion of SVB Financial Group’s Silicon Valley Bank spreads to other lenders.
Depositors at the New York-based bank will have access to their money under “a similar systemic risk exception” to one that will allow Silicon Valley Bank clients to get their money on Monday, the Treasury Department, the Federal Reserve and the Federal Insurance Deposit Corp. said in a joint statement Sunday.
“All depositors of this institution will be made whole,” the regulators said. “As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.”
Signature Bank, a New York state-chartered commercial bank that’s FDIC-insured, had total assets of about $110.36 billion and total deposits of roughly $88.59 billion as of Dec. 31, the New York Department of Financial Services said in a separate statement.
Signature Bank representatives didn’t immediately respond to a request for comment.
Silicon Valley Bank abruptly became the biggest US lender to fail in more than a decade on Friday, unraveling in less than 48 hours after outlining a plan to shore up capital. The bank took a huge loss on sales of its securities amid rising interest rates, spooking investors and depositors who rapidly began pulling their money. On Thursday alone, investors and depositors tried to yank about $42 billion.
US regulators are racing against the clock to find solutions for failed Silicon Valley Bank and stop a potential contagion from spreading to other lenders. Treasury Secretary Janet Yellen said Sunday that she approved a resolution for Silicon Valley Bank “that fully protects all depositors.” Concern about the health of other smaller banks focused on the venture capital and startup communities is prompting regulators to consider extraordinary measures to protect financial institutions and their depositors.
New York’s Department of Financial Services is in “close contact with all regulated entities in light of market events, monitoring market trends and collaborating closely with other state and federal regulators to protect consumers, ensure the health of the entities we regulate and preserve the stability of the global financial system,” Superintendent Adrienne A. Harris said in her agency’s statement.
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