New York-based Signature Bank was closed by state regulators on Sunday, just two days after the collapse of Silicon Valley Bank, triggering concerns across global markets and leaving billions of dollars in deposits at risk.
In a joint statement, the U.S. Treasury Department and other banking regulators assured that all depositors of Signature Bank would be fully protected, with “no losses to be borne by the taxpayer.”
Signature Bank’s closure is now the third-largest bank failure in U.S. history.
The New York Department of Financial Services appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver to manage the bank’s assets.
As of March 8, Signature Bank reported $89.17 billion in deposits and approximately $110.36 billion in assets as of December 31, according to state regulators.
Signature Bank representatives did not immediately respond to requests for comments.
This shutdown follows Silicon Valley Bank’s recent failure, marking the largest U.S. bank collapse since Washington Mutual’s fall in 2008.
U.S. officials announced on Sunday that Silicon Valley Bank customers would regain access to their deposits starting Monday, while also unveiling steps to protect deposits and prevent wider financial disruptions.
Signature Bank operated nine national business lines, including commercial real estate and digital asset banking, with private client offices in New York, Connecticut, California, Nevada, and North Carolina.
Nearly 25% of Signature’s deposits were tied to the cryptocurrency sector as of September, but the bank had announced plans to reduce its crypto-related deposits by $8 billion in December.
In February, Signature Bank announced CEO Joseph DePaolo would step down to become a senior adviser in 2023, with COO Eric Howell set to take over. DePaolo had been with the bank since its inception in 2001.
Signature Bank had a long-standing relationship with former President Donald Trump, providing financial services to Trump and his business ventures. However, the bank severed ties in 2021 following the January 6 Capitol riots and called for Trump to resign.
Officials clarified on Sunday that shareholders and certain unsecured debt holders of both Signature Bank and Silicon Valley Bank would not receive protection, and senior management of both banks has been removed.
Any losses to the FDIC’s Deposit Insurance Fund, which will cover uninsured depositors, will be recovered through a special assessment on banks, as mandated by law.
