Signature bank became the third-largest failure in U.S. banking history since 2007 Financial crisis.
Silicon Valley Bank shutdown is followed by New York based Signature Bank amid the weakening of the financial system. The Federal Deposit Insurance Corporation (FDIC) took control of the Signature this week.
As per the data provided by the New York state’s Department of Financial Services, the bank has $110.36 billion in assets and $88.59 in deposits at the end of 2022.
Following the collapse, the U.S. Treasury Department and other bank regulators said in a joint statement that all the depositors of the Silicon Valley Bank (SVB) and Signature Bank will be made whole and no losses will be borne by the taxpayers.
SVB was the 16th largest lender in the U.S. that was shut down by the U.S. authority after massive customer deposit withdrawals. The incident erased $100 billion in market value from U.S banks while the government tries to restore faith in the financial system.
In a welcoming move, FDIC establishes a bridge bank which will enable customers to access their funds starting this week.
As of Sept 2022, Signature bank holds just a quarter of its deposits from the crypto sector. The bank has already announced to bring down its crypto-related deposit which stands at $8 billion as of Dec 2022.
The back-to-back collapse has raised concerns of another financial crisis which was spurred into action after the FED kept their stand on increasing rates since 2021.
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Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.