New York state regulators on Sunday shut down Signature Bank as the bad consequence from last week’s failure of Silicon Valley Bank spreads to other banks. They tried to stop the banking crisis from spreading.
Depositors(储户) 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. “All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be afforded by depositors,” the regulators said.
Silicon Valley Bank suddenly became the biggest US lender to fail in more than a decade on Friday. The bank took a huge loss on sales of its securities(有价证券) because of rising interest rates, making investors and depositors quickly begin pulling their money. On Thursday alone, investors and depositors tried to withdraw about $42 billion.
Signature Bank, a New York commercial bank that’s FDIC-insured, had total assets(资产) 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.
To stop the damage and avoid a bigger crisis, the Fed and Treasury created an emergency program to backstop deposits at both Signature Bank and Silicon Valley Bank using the Fed’s emergency lending authority. The FDIC’s deposit insurance fund will be used to cover depositors, many of whom were uninsured due to the $250,000 guarantee on deposits. While depositors will have access to their money, equity(股权) and bondholders(债券持有人) at both banks are being wiped out, a senior Treasury official said.
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