Another Bank Down! Regulators close Signature Bank as Fears of Banking Collapse & Bank Runs Escalate
Another Bank Down! Regulators close New York’s Signature Bank as Fears if Banking Collapse and Bank Runs Escalate
This afternoon, U.S. regulators shut down New York-based Signature Bank in an attempt to prevent the spreading banking crisis.
“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority,” Treasury, Federal Reserve, and FDIC said in a joint statement Sunday evening.
The banking regulators said depositors at Signature Bank would have full access to their deposits.
“All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer,” the regulators said.
The news comes as fears of bank runs have swept the industry after regulators shut down Silicon Valley Bank on Friday and seized its deposits in the largest U.S. banking failure since the 2008 financial crisis — and the second-largest ever.
On Saturday, First Republic Bank, another bank that is rumored to be facing major troubles, saw an attempted run on many of its branches in California.
Banking regulators say they devised a plan Sunday to backstop depositors with money at Silicon Valley Bank, a critical step in stemming a major collapse in the banking industry. Regulators said depositors at both failed SVB and Signature Bank in New York, which also has been closed, will have full access to their deposits.
The Federal Reserve also said it is creating a new Bank Term Funding Program aimed at safeguarding institutions impacted by the market instability of the SVB failure.
A joint statement also said there would be no bailouts and no taxpayer costs associated with any of the new plans. Shareholders and some unsecured creditors won’t be protected.
“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” said a joint statement from Fed Chair Jerome Powell, Treasury Secretary Janet Yellen and FDIC Chair Martin Gruenberg.
The overall Economic numbers are downright Scary!
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