Within three days, two banks in the United States were shut down. Three days ago, Silicon Valley Bank closed. Then three days later, Signature Bank was shut down. New York-based Signature Bank has been shut down by the regulator on Sunday. It is the third largest bank foreclosure in US history.
Although the exact reason for this bank`s closure is unknown, the Federal Reserve and the US Department of Revenue stated in a joint statement that the decision was taken to safeguard the US economy and protect public`s trust.
The US Federal Deposit Insurance Corporation (FDIC) took control of Signature Bank. Signature Bank has total assets of $11,360 million and deposits of $8,850 million. But, these two banks (SVB or Signature) will not be bailed out. The interests of the depositors will also be protected, they said.
Similar to SVB, the closure of Signature Bank was unexpectedly announced. Employees met on Sunday at the Manhattan headquarters of Signature Bank despite the holiday. T they even placed an order for lunch from a Italian restaurant Carmine along with Starbucks coffee. But as they sipped their coffee, they heard that the bank would be closing. The employees left the main office by themselves as soon as this announcement was made.
The FDIC moved all of Signature Bank`s accounts to Fifth Third Bank Corporation in order to protect depositors` interests. Consumers may now access their accounts.
According to the joint release, shareholders and some unsecured creditors will not be compensated. The bank`s top management has already been removed. Moreover, any losses incurred by the FDIC in protecting uninsured depositors would be recovered through a special assessment of Signature Bank. It will be done under legal interpretation.
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