Signature Bank Shut Down By Federal Regulators
EDITOR'S NOTE: Signature Bank's decision to terminate its relationship with Silicon Valley Bank highlights the fragility of the financial industry, which is teetering on the brink of potential collapse. But even that did very little to help it, as Signature has been shut down by financial regulators. The tech sector's dependence on Silicon Valley Bank has made it vulnerable to financial instability, with mounting losses and executive departures pointing to a looming disaster.
This move by Signature Bank could trigger a chain reaction of bank failures and financial chaos, with dire consequences for the global economy. As the financial landscape continues to shift, it's time to face the reality of the precarious state of the financial industry and take decisive steps to hedge your risks, protect your investments, and seek safety from all dollar-based assets.
Founded in 2001, the New York-based Signature Bank was popular among crypto companies
Federal regulators on Sunday said New York-based Signature Bank was being shut down to protect consumers and the financial system following the collapse of California’s Silicon Valley Bank.
A similar program, they said, was being enacted for Signature Bank, which was closed Sunday by its state chartering authority.
"All depositors of this institution will be made whole," the joint statement read. "As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer."
A spokesperson for Signature Bank declined to comment.
Founded in 2001, the New York-based Signature Bank was popular among crypto companies. The institution provided deposit services for its clients’ digital assets but did not make loans collateralized by them.
Leading up to SVB’s collapse, the bank said it had been trying to reduce these deposits. As recently as Thursday, Signature said it was in a "well-diversified financial position" and had "limited digital-asset related deposit balances in the wake of industry developments."
"We want to make it clear again that Signature Bank is a well-diversified, full-service commercial bank with more than two decades of history and solid performance serving middle market businesses," Joseph J. DePaolo, Signature Bank Co-founder and Chief Executive Officer said in a statement.
"We have built a strong reputation serving commercial clients through nine business lines and reached in excess of $100 billion in assets by continually executing our single-point-of-contact, relationship-based model where banking teams are capable of meeting all client needs."
Signature was notable for having former Democratic Congressman Barney Frank on its Board. Frank’s signature Dodd-Frank Act, crafted in the wake of the 2008 financial crash, sought to improve accountability and transparency in the financial system.
Under that law, banks with assets in excess of $50 billion were deemed as being potentially "too big to fail," and were therefore subject to a host of rigorous testing and regulation.
In 2018, President Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act, which rolled back key regulations in the Dodd-Frank bill.
Originally published by: Bradford Betz on FOX Business
