New Delhi: The US Banking Crisis is not letting up in the banking sector in America. After Silicon Valley Bank (SVB), the second bank has been locked up. Signature Bank, which is said to be crypto friendly, has been temporarily closed. The bank had a stock of cryptocurrency and considering its risk it has been decided to temporarily close this regional bank of New York.
$110 billion in assets
According to a report, after Silicon Valley Bank, Signature Bank has become the next victim of the ongoing banking crisis in America. The Federal Deposit Insurance Corporation (FDIC) acquired Signature Bank, which had $110.36 billion in assets at the end of last year, while the bank had $88.59 billion in deposits, according to New York State’s Department of Financial Services.
Third major crisis since 2008
This is the third largest failure in American banking history, just two days before the collapse of Silicon Valley Bank. It was the second largest shutdown after Washington Mutual, which collapsed during the financial crisis, and is now Signature Bank. Let us tell you that the biggest crisis in the banking sector of America came in the year 2008. That year the banking firm Lehman Brothers declared itself bankrupt. After this there was an economic depression all over the world including America and the economy was broken.
Efforts to emerge from the crisis are ongoing
Signature Bank is a regional bank in New York and shares of this bank saw a decline last Friday. However, amid the banking crisis, the US Treasury Department and other bank regulators said in a joint statement that all depositors of Signature Bank and Silicon Valley Bank would not be harmed. In this context, the US Federal Reserve (US Fed) has also called an emergency meeting on March 13, 2023, to discuss measures to tackle the banking crisis.
Provides services including NY-CA
According to the report, the Federal Deposit Insurance Corporation (FDIC) has said that a bridge bank has been established, which will enable bank customers to access their funds. According to the FDIC, signature bank depositors and borrowers will automatically become bridge bank customers. The regulator has nominated former Fifth Third Bancorp CEO Greg Carmichael as CEO of Bridge Bank.
Let us tell you that Signature Bank is a commercial bank providing customer services in New York, Connecticut, California, Nevada and North Carolina. About a quarter of its deposits came from the cryptocurrency sector by September 2022, but the bank announced in December that it would reduce its crypto-related deposits to $8 billion.
What did Joe Biden say on the banking crisis?
Silicon Valley Bank is the 16th largest bank in America. It is a major US bank that provides financial support to new age tech companies and venture capital investment firms. However, the US Federal Reserve has raised interest rates over the past 18 months. Due to which such companies have suffered huge losses. US President Joe Biden has said of this banking crisis that I am committed to holding those responsible for this mess fully accountable and to continuing my efforts to strengthen oversight of the big banks so we don’t get into this again.