Federal authorities declared on Sunday that New York's Signature Bank had been shut down to protect clients and the financial system in the wake of the demise of California's Silicon Valley Bank.
A joint statement from the United States made the announcement. Federal Reserve, Department of the Treasury, and Federal Deposit Insurance Corporation (FDIC).
U.S. officials claim that a similar program has been issued for Signature Bank, which was shut down on Sunday due to Federal Reserve state restrictions, as they worry about the demise of Silicon Valley Bank.
Depositors at Signature Bank will have access to their money, according to bank authorities. The U.S. official stated:
“All Signature Bank depositors will be fully refunded. As with the solution for Silicon Valley Bank, taxpayers will not suffer any damage,”
This is an attempt to stop the issue from getting worse.
A significant bank in the cryptocurrency sector, New York's Signature Bank, offered deposit services for its clients' digital assets but did not make loans backed by them.
The bank also stated on Thursday that due to market developments, it has a well-diversified financial position and just a small amount of deposit balances relating to digital assets. Joseph J. DePaolo, Signature Bank Co-founder and Chief Executive Officer stated:
“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,”
After depositors flocked to withdraw money this week over worries about the health of the banks, which are directly tied to the closure of Signature, Silicon Valley Bank, the 16th largest bank in the nation, filed for bankruptcy on Friday. The second-largest bank failure in American history occurred in 2008 with the collapse of Washington Mutual.