US second leading lender Signature Bank closed, authorities vow to save depositors’ money

US Bank closure: US authorities on Monday announced the closure of second tech-friendly Signature Bank. US higher officials said that the measures have been taken to save depositors’ money from Silicon Valley Bank and also assured full help to other financial institutions in fulfilling customers’ requirements.

Financial institutions, including the US Treasury, said in a joint statement that SVB depositors will have access to “all of their money” as of Monday, March 13, and that American taxpayers would not be responsible for the cost.

The Federal Deposit Insurance Corporation (FDIC), the US Federal Reserve, and the Treasury announced that depositors in Signature Bank, a leading lender with a significant cryptocurrency exposure based in New York that was shut down on Sunday after its stock price crashed, would also be “made whole.”

Updates on failure of Silicon Valley Bank and Signature Bank:

On Sunday, the US government took extraordinary measures to avert a potential banking crisis following the historic failure of Silicon Valley Bank, assuring all depositors at the failed institution that they could quickly access all of their money even as another significant bank, Signature Bank, was shut down.
Regulators stated on Sunday that New York-based Signature Bank had also failed and was being seized, a sign of how quickly the financial haemorrhage was taking place. The third-largest bank failure in US history, Signature Bank had assets of more than $110 billion. After the financial crisis of 2008, SVB has been the biggest retail bank to fail.
 After the collapse of American bank shares on Friday, Asian lenders continued to suffer losses; HSBC, National Australia Bank, and Mitsubishi UFJ Financial Group all had significant declines on Monday.
Its issues grew as a result of the US Federal Reserve’s year-long interest rate increases, which caused the securities it owned to sell for far less than they were worth. This issue could affect other banks.
On Friday, Silicon Valley Bank, a financial institution with more than $200 billion in assets, faced a conventional run on the bank, in which depositors tried to take all of their money at once. Authorities hastened to liquidate Silicon Valley Bank.

 

 

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