Signature Bank becomes the third-largest bank failure in U.S. history, behind Silicon Valley Bank and Washington Mutual in 2008.
Just two days after shutting down Silicon Valley Bank, regulators announced Sunday that the New York-based Signature Bank had been seized, citing a"systemic risk exemption.""All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer," said the Treasury, the Federal Reserve, and the Federal Deposit Insurance Corporation in a joint statement Sunday evening.
The statement also noted that shareholders and certain"unsecured debtholders" would not be protected. Senior management was also removed. "Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law," the statement read."The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry."
Following the bank closure, President Joe Biden took to Twitter to say that he is"firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again." President Biden also reassured the American people and businesses that their"bank deposits will be there when they need them."
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