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State closes NYC-based bank as regulators seek to stem crisis
By
Jake Offenhartz
Published Mar 12, 2023
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By
Jake Offenhartz
Published Mar 12, 2023
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New York financial authorities have taken possession of Signature Bank, a Manhattan-based bank widely used by the cryptocurrency industry, as regulators raced to stem the fallout from last week’s collapse of Silicon Valley Bank.
In an announcement on Sunday evening, federal regulators said they would protect depositors at both Silicon Valley Bank and Signature Bank. The latter, which is headquartered in Midtown, was shuttered on Sunday, according to a joint statement by the Department of Treasury, the Federal Reserve, and the FDIC.
“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,” the statement read. “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.”
The closure comes days after a run on Silicon Valley Bank led to the country’s largest bank failure since the 2008 financial crisis. Shares of Signature Bank dropped precipitously shortly after.
According to the New York Department of Financial Services, Signature Bank had assets totaling $110.36 billion and deposits of approximately $88.59 billion at the end of 2022.
By designating both Silicon Valley Bank and Signature Bank as threats to the financial system, federal officials were able to take emergency steps to ensure clients of both institutions will have access to their funds on Monday morning.
Gov. Kathy Hochul said Sunday night that she was working closely with federal partners and the New York Department of Financial Services Superintendent Adrienne Harris to “stabilize the banking sector and protect the hard-earned money of New Yorkers whose livelihoods depend on impacted companies."
“Many depositors at these banks are small businesses, including those driving the innovation economy, and their success is key to New York's robust economy," she continued.
Earlier in the day, Mayor Eric Adams said the city would work to provide information to those who might be at risk.
“We are going to have the coordination with the federal government, the state, as well as here in the city to be a conduit of information so we can relieve some of the anxiety that many people are feeling right now during these uncertainties with this major banking institution for tech startups going under," he said.
Tagged
new york city
economy
Jake Offenhartz
Jake Offenhartz is a former Gothamist reporter.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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