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Former Rep. Barney Frank (D-MA), author of the 2010 Dodd-Frank bill, sat on the board for Signature Bank which collapsed in the wake of the Silicon Valley Bank (SVB) implosion.
The U.S. Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) announced in a joint statement on Sunday the plan to manage the fallout of SVB’s collapse as well as the demise of Signature Bank.
“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” the joint statement read. “This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.”
“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority,” it added. “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.”
Silicon Valley Bank collapsed last Friday after depositors rushed to withdraw money in fear of its impending fall. It was the 16th largest bank in the country.
NEW:
*Signature Bank has been closed
*All depositors of Silicon Valley Bank and Signature Bank will be fully protected
*Shareholders and certain unsecured debtholders will not be protected
*New Fed 13(3) facility announced with $25 billion from ESF to backstop bank deposits pic.twitter.com/LKipIRMg1T
Nick Timiraos (@NickTimiraos) March 12, 2023
The bank that was just closed, Signature Bank, is the one that Barney Frank joined after retiring from Congress pic.twitter.com/25TNEFn3GK
— Lee Fang (@lhfang) March 12, 2023
Signature Bank became “popular among crypto companies” and provided “deposit services for its clients’ digital assets but did not make loans collateralized by them” according to Fox Business.
