On March 12, 2023, the New York District of Financial Services took possession of Signature Bank and announced the closure of Silicon Valley Bank to protect the US economy and strengthen public confidence in the banking system.
This move was met with praise from US politicians, including President Joe Biden, who tweeted that he was pleased with the solution that protects workers, small businesses, taxpayers, and the financial system.
Biden also vowed to hold accountable those responsible for the collapse of the banks while reassuring Americans that their deposits are safe.
He added that he would have more to say on the matter in an address on March 13. Senator Sherrod Brown and Representative Maxine Waters also shared praise for the recent federal regulator actions aimed at stemming contagion from the banking collapses.
Meanwhile, U.S. Securities Exchange Commission Chairman Gary Gensler reinforced the SEC’s commitment to investigating and bringing enforcement actions against violators of U.S. securities laws.
The shuttering of Silicon Valley Bank temporarily triggered the depegging of Circle’s USD Coin (USDC) to as low as $0.88 on March 11, but the Federal Reserve’s confirmation that all customer deposits at Signature Bank and Silicon Valley Bank would be made whole helped stabilize the cryptocurrency.
While the closure of Silicon Valley Bank and the takeover of Signature Bank may have caused concern for some Americans, the actions taken by the federal regulators have been praised for their efforts to protect workers, small businesses, taxpayers, and the financial system.
The commitment from President Biden and other US politicians to hold those responsible accountable provides further reassurance to Americans that their deposits are safe.