Signature Bank Collapses, Prompting Federal Authorities to Take Action

In another blow to the US banking industry, Federal regulators have closed Signature Bank, citing systemic risk. The closure comes after Silicon Valley Bank’s closure sparked fears across the country.

The Federal Reserve expressed concerns about the systemic risks posed by the crypto-focused bank, marking the latest bank to be shut down.

The Federal Deposit Insurance Corporation (FDIC) has announced that it will make all depositors of Signature Bank whole.

The move is a bid to protect the country’s economy, with regulators seeking to strengthen public confidence in the banking system. They are confident that measures taken after the 2008 recession are enough to prevent a large-scale crisis.

Signature Bank is one of the biggest crypto banks in the country, behind another major crypto-associated bank, Silvergate, which is also in turmoil.

The markets have responded in kind, with the closure of Signature Bank sending shockwaves through the industry. The markets saw red before clawing back some growth over the year.

The discussions surrounding Silicon Valley Bank and Silvergate have dominated headlines recently. Analysts have paid attention to what U.S. Treasury Secretary Janet Yellen has said, with the latter confirming that Silicon Valley Bank wouldn’t receive a bailout.

The focus is on protecting depositors, with regulators emphasizing the importance of maintaining access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.