[TOWNHALL] If you thought today would be a great market day, you’re either on crack or are so wealthy that you can absorb the losses if you were deep in financial stocks. The closure of Silicon Valley Bank and Signature Bank has many on edge since many fear a domino effect. Silicon Valley Bank, which had no risk assessment officer for eight months, collapsed over the weekend, hastened by the institution’s announcement to raise capital to cover massive losses it took with the fluctuating tech market; SVB is a go-to bank for loans for fledgling start-ups. That news triggered a panic, a run, and now Caliphornia, an impregnable bastion of the Democratic Party, officials have taken over and given the Federal Deposit Insurance Corporation the reins. Signature Bank, which is a cryptocurrency operation, was shuttered over ’systemic risk’ concerns (via CNBC):U.S. regulators on Sunday shut down New York-based Signature Bank, a big lender in the crypto industry, in a bid 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," the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. said in a joint statement Sunday evening.
The banking regulators said depositors at Signature Bank will have full access to their deposits, a move similar to that which was made to ensure depositors at the failed Silicon Valley Bank will get their money back.
"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 regulators shuttered 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. The dramatic moves come just days after the tech-focused institution reported it was struggling, triggering a run on the bank’s deposits.
Signature is one of the main banks to the cryptocurrency industry, the biggest one next to Silvergate, which announced its impending liquidation last week. It had a market value of $4.4 billion as of Friday after a 40% sell-off this year, according to FactSet.