Regulators Takeover Signature Bank to Protect Depositors and Financial System

On Sunday, regulators announced the takeover of Signature Bank, one of the largest banks in the United States, to protect its depositors and the stability of the U.S. financial system. The move came after customers of Signature Bank withdrew more than $10 billion in deposits late Friday, spooked by the sudden collapse of Silicon Valley Bank.

Signature Bank had 40 branches, assets of $110.36 billion and deposits of $88.59 billion at the end of 2022, according to a regulatory filing. The sudden move shocked executives of Signature Bank, a New York-based institution with deep ties to the real estate and legal industries, said board member and former U.S. Rep. Barney Frank.

The run on deposits quickly led to the third-largest bank failure in U.S. history. It appears to have assets to cover the great majority of its deposits. To protect the whole banking system, regulators decided to guarantee all deposits at Signature and Silicon Valley Bank due to “systemic risk”.

The exact situation at Signature Bank is unclear, though it had more exposure to the imploding crypto sector. It is believed that the issue at Silicon Valley Bank was largely one of liquidity. The debate over what counts as a “bailout” has been a noteworthy issue to emerge in the last 48 hours.

Signature Bank was one of the largest banks in the United States, and its sudden collapse has caused shockwaves throughout the banking industry. Regulators have stepped in to guarantee deposits and protect the stability of the U.S. financial system. The exact cause of the collapse is still unknown, but it appears to have assets to cover the majority of its deposits.