on friday, signature bank Surprised by Silicon Valley Bank’s sudden collapse, customers withdrew more than $10 billion in deposits, board members told CNBC.
Deposit runs quickly led to the third largest bank failure in US history.regulator announced The signature took over late Sunday to protect its depositors and the stability of the US financial system.
The sudden move shocked executives at the undersigned bank, a New York-based institution with deep ties to the real estate and legal industries. Bernie FrankSignature had 40 branches, $110.36 billion in assets and $88.59 billion in deposits at the end of 2022, according to regulatory filings.
“We didn’t see any signs of a problem until late Friday when the deposit was made.
The shrinking of crypto-focused Silvergate Bank last week boiled over problems for U.S. banks with exposure to crypto and tech startups, the asset class most bubbled during the coronavirus pandemic. The company’s bankruptcy had long been expected, but uninsured deposits helped ignite panic about the large bank. Venture capital investors and founders Silicon Valley Bank I created an account on Thursday and it was seized by noon on Friday.
spreading worries
that puts pressure on signatures, First Republic and other names late last week based on concerns that uninsured deposits could become locked up or lose value.
signing bank Established in 2001 As a better business alternative to the big banks. It expanded to the West Coast and entered the cryptocurrency industry in 2018, fueling deposit growth in recent years. The bank created a 24/7 payment network for cryptocurrency customers and from digital asset-related customers he had deposits of $16.5 billion.
Stocks of undersigned banks are under pressure.
But amid a wave of concerns late last week, Signature customers moved their deposits to larger banks. JP Morgan Chase and city ​​groupsaid Frank.
According to Frank, Signature management sought “everything” to improve the situation, including finding more funding and attracting interest from potential buyers. Deposit outflows slowed by Sunday, and management believed the situation had stabilized.
Instead, Signature’s top manager was summarily sacked and the bank closed on Sunday. Regulators are now enforcing the bank’s sales process while ensuring customers have access to their deposits. service It goes on without a break.
poster child
The move raised eyebrows among observers. In the same Sunday announcement that identified the SVB and signatories as risks to financial stability, the regulator unveiled new facilities to boost confidence in other banks in the country.
Another bank under pressure recently, First Republic Declared That there was more than $70 billion in untapped funds from the Federal Reserve and JPMorgan Chase.
Frank, who helped draft the landmark Dodd-Frank Act after the 2008 financial crisis, said there was “no real objective reason” that signatures should be seized.
“I think part of what happened was that the regulators wanted to send a very strong anti-crypto message,” Frank said. We became billboard boys.”