Another Bank Down! Regulators close New York’s Signature Bank as Fears if Banking Collapse and Bank Runs Escalate
This afternoon, U.S. regulators shut down New York-based Signature Bank in an attempt to prevent the spreading banking crisis.
“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,” Treasury, Federal Reserve, and FDIC said in a joint statement Sunday evening.
The banking regulators said depositors at Signature Bank would have full access to their deposits.
“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 regulators said.
The news comes as fears of bank runs have swept the industry after regulators shut down Silicon Valley Bank on Friday and seized its deposits in the largest U.S. banking failure since the 2008 financial crisis — and the second-largest ever.
On Saturday, First Republic Bank, another bank that is rumored to be facing major troubles, saw an attempted run on many of its branches in California.
Banking regulators say they devised a plan Sunday to backstop depositors with money at Silicon Valley Bank, a critical step in stemming a major collapse in the banking industry. Regulators said depositors at both failed SVB and Signature Bank in New York, which also has been closed, will have full access to their deposits.
The Federal Reserve also said it is creating a new Bank Term Funding Program aimed at safeguarding institutions impacted by the market instability of the SVB failure.
A joint statement also said there would be no bailouts and no taxpayer costs associated with any of the new plans. Shareholders and some unsecured creditors won’t be protected.
“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” said a joint statement from Fed Chair Jerome Powell, Treasury Secretary Janet Yellen and FDIC Chair Martin Gruenberg.
The overall Economic numbers are downright Scary!
- Silicon Valley Bank Collapse causing fears of market contagion and Bank Runs
- Stock & crypto markets crash, U.S. debt to soar past $50 trillion within 10 years as Biden to Raise Taxes
- Commercial Real Estate Collapse Latest Warning Sign to Prepare for Major Economic Troubles
- Food Shortages: American Food Supply in Real Danger, expected to get worse in 2023
- US inflation surges as economy becomes top preparedness threat
- U.S. money supply, which measures safe assets households and businesses can use to make payments, has fallen abruptly since March and is negative on a yearly basis for the first time since 2006.
- Mortgage payments as a share of income have doubled from 13% to 26%, and the savings rate has plummeted to almost zero.
- Total household debt increased by 8.5% in 2022 and now stands at a record $16.9 trillion. That’s $2.75 trillion higher than it was pre-pandemic.
- Sales of commercial mortgage bonds have taken a nose dive, plummeting about 85% year-over-year as commercial real estate investors are bracing for what looks like a wave of defaults throughout the commercial real estate industry.
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