Former President Trump might be glad Signature Bank refused his business following the Capitol riot, now that the New York-based lender is the latest institution to be shut down by regulators.
Word that the New York state regulators had closed down the bank came on Sunday, just two days after the California-based Silicon Valley Bank collapsed. The activity has generated fears that jittery depositors could try to withdraw their savings from lenders around the country, potentially destabilizing the banking system. But back in 2021, Signature Bank didn’t want one billionaire’s business.
“We witnessed the President of the United States encouraging the rioters and refraining from calling in the National Guard to protect the Congress in its performance of duty,” Signature Bank said in a statement at the time. “At this point in time, to ensure the peaceful transition of power, we believe the appropriate action would be the resignation of the President of the United States, which is in the best interests of our nation and the American people.”
CNBC reported that Signature Bank was deeply invested in volatile cryptocurrency and had $110.4 billion in total assets and $88.6 billion in total deposits as of the end of 2022. After Sunday’s move by state regulators, the Federal Deposit Insurance Corporation took control of the bank.
The shutdown of Silicon Valley Bank, the nation’s 16th-largest lender, was the biggest collapse of a bank since Washington Mutual in 2008. Federal officials insisted Sunday that all Silicon Valley and Signature Bank’s depositors will be made whole.
“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,” federal officials from agencies including the Treasury Department said in a joint statement Sunday. “All depositors of this institution will be made whole,” noting “as with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.”
It was not clear how depositors would get their money back. The FDIC insures deposits up to $250,000, but Silicon Valley Bank is believed to have held massive cash reserves for tech companies, wineries, and venture capitalists. Further clouding matters, Treasury Secretary Janet Yellen said on a Sunday morning news show there would be no bailout of Silicon Valley Bank.
In addition to being heavily invested in cryptocurrencies, both Silicon Valley and Signature banks were advocates of so-called Environmental, Social, and Governance policies, which put woke ideologies ahead of maximizing profits.
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Other lenders were reportedly asked to bid on taking over the assets of Silicon Valley Bank, although at least one, PNC, said it was not interested.
President Joe Biden sought to assure depositors in a speech early Monday.
“Americans can have confidence that the banking system is safe, your deposits will be there when you need them,” he said. “No losses will be borne by the taxpayers.”