Signature Bank Closed by New York Regulators in SVB’s Wake

[excalibur]

First Silicon Valley Bank, now Signature Bank.

Isn't insurance up to $250,000.00? How are they going to make people above that amount whole?

Signature Bank was closed by New York state financial regulators on Sunday as the fallout from last week’s implosion of SVB Financial Group’s Silicon Valley Bank spreads to other lenders.

Depositors at the New York-based bank will have access to their money under “a similar systemic risk exception” to one that will allow Silicon Valley Bank clients to get their money on Monday, the Treasury Department, the Federal Reserve and the Federal Insurance Deposit Corp. said in a joint statement Sunday.

“All depositors of this institution will be made whole,” the regulators said. “As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.”

The decision to put Signature into receivership came as a surprise to its managers, who found out shortly before the public announcement, said a person familiar with the company’s operations. The bank faced a torrent of deposit outflows on Friday, but the situation had stabilized by Sunday, the person said, asking not to be identified discussing a private matter.

A Signature Bank representative declined to comment.

Signature Bank, a New York state-chartered commercial bank that’s FDIC-insured, had total assets of about $110.36 billion and total deposits of roughly $88.59 billion as of Dec. 31, the New York Department of Financial Services said in a separate statement.

...​

Signature Bank Closed by New York Regulators in SVB’s Wake

Signature Bank was closed by New York state financial regulators on Sunday as the fallout from last week’s implosion of SVB Financial Group’s Silicon Valley Bank spreads to other lenders.

www.bloomberg.com

 

[excalibur]

 

[Circe]

First Silicon Valley Bank, now Signature Bank.

Isn't insurance up to $250,000.00? How are they going to make people above that amount whole?

Their press release said they will get the money by "assessing" other banks: a tax on all banks. Okay ------ not a bad idea, for a quick fix, anyway. Still, it doesn't help the moral hazard issue.

We are all watching First Republic Bank now, right? As of now, it has not been closed.

 

[excalibur]

First Republic, Other Regional Banks Hit Despite Fed Backstop

Banking stocks fail to launch a rebound Monday even after the U.S. government and regulators intervened in a bid to prevent a potential crisis after the sudden collapse of Silicon Valley Bank.

www.barrons.com

 

[Circe]

First Republic, Other Regional Banks Hit Despite Fed Backstop

Banking stocks fail to launch a rebound Monday even after the U.S. government and regulators intervened in a bid to prevent a potential crisis after the sudden collapse of Silicon Valley Bank.

www.barrons.com

Oh, no, this very evening First Republic came out with the dreaded statement everyone hates to see --- that all is well, and all is well, and all manner of things are well. The CEO said,

"We want to take a moment to reinforce the safety and stability of First Republic, reflected in the continued strength of our capital, liquidity and operations,”

It's the kiss of death, usually. If a bank has to say that, it always, always means a crisis is happening and the bank may fail.

 

[Moonglow]

Capitalists used to be forced fed dollars but now they be dying of starvation.....The old bond market ain't what it used to be....

 

[g5000]

First Silicon Valley Bank, now Signature Bank.

Isn't insurance up to $250,000.00? How are they going to make people above that amount whole?

By selling the assets of the bank.

 

[excalibur]

By selling the assets of the bank.

If they have such sufficient assets then why were they closed?

 

[g5000]

If they have such sufficient assets then why were they closed?

Their assets are underwater. Just like anyone who bought a house from 2005 to 2008 was underwater after the financial sector collapsed.

If you owe more than your house is worth, you are underwater. And that is no problem so long as you can keep making the payments on the mortgage.

But if you can't keep making the payments because your mortgage reset, then you're fucked. You have to sell your house for what you can and take a loss and default.

SVB's assets are underwater, and their debts must have reset.

SVB has to sell their assets at a loss. That does not mean there is no money. What money is gained by selling their assets goes to their clients/depositors/etc. Just like when you sell your underwater house, what money you get for it goes to the bank you owe money to.

 

[excalibur]

Their assets are underwater. Just like anyone who bought a house from 2005 to 2008 was underwater after the financial sector collapsed.

If you owe more than your house is worth, you are underwater. And that is no problem so long as you can keep making the payments on the mortgage.

But if you can't keep making the payments because your mortgage reset, then you're fucked. You have to sell your house for what you can and take a loss and default.

SVB's assets are underwater, and their debts must have reset.

SVB has to sell their assets at a loss. That does not mean there is no money. What money is gained by selling their assets goes to their clients/depositors/etc. Just like when you sell your underwater house, what money you get for it goes to the bank you owe money to.

Deposits are guaranteed for $250,000, not more. Either that is the rule/law or it isn't.

Forced selling of billions of dollars in bonds would normally depress the prices of those bonds, so Uncle Fed will be playing games if people are made whole beyond that $250.000.

 

[1srelluc]

If Barney just walked by a bank it should have been stress tested.

Damn.....Talk about your "usual suspects".

 

[excalibur]

LOL

Signature Bank de-banked Trump after Jan 6—now the regulators have shut them down

 

[Silent Warrior]

If they have such sufficient assets then why were they closed?

They don't have sufficient assets. However, the payout of the deposit insurance when added to the assets they have may cover the depositors.

 

[struth]

we warned you all what would happen under xiden…what a mess

 

[g5000]

we warned you all what would happen under xiden…what a mess

No you didn't. And you are an idiot.

 

[struth]

No you didn't. And you are an idiot.

of course i told yoj all electing xiden would be horrible. All demafasict policies do is make people poorer and create chaos

 

[g5000]

of course i told yoj all electing xiden would be horrible. All demafasict policies do is make people poorer and create chaos

All you are doing is exposing your massive financial ignorance.

These bank collapses have nothing to do with wokism, Ukraine, Jewish conspiracies, UFOs, Mexicans, China, global warming, the fleas on a whore's back, or the alcohol content of rum.

 

[g5000]

In 2018, Donald Trump signed a law repealing portions of Dodd-Frank. The capital requirements were lowered, and stress tests were eliminated.

Following that de-regulation, banks like SVB began increasing their interest rate risk tremendously. In a single year, SVB increased its sovereign and corporate debt holdings by an astonishing 158 percent.

SVB did not hedge these risks.

Every single goddam time some assholes de-regulate banks, disaster follows a few short years later.

They never learn.

"Duhhhhh...yeahbut Biden!"

 

[multivita-man]

In 2018, Donald Trump signed a law repealing portions of Dodd-Frank. The capital requirements were lowered, and stress tests were eliminated.

Following that de-regulation, banks like SVB began increasing their interest rate risk tremendously. In a single year, SVB increased its sovereign and corporate debt holdings by an astonishing 158 percent.

SVB did not hedge these risks.

I doubt the poster in question would even know what the fuck you're talking about but you're correct.

Op-ed: Silicon Valley Bank's Failure in Risk Management

What brought SVB down? From a risk management perspective, it made several blunders. The first was in placing large bets on interest rates. Clifford Rossi, who

www.newswise.com

At the end of 2022, SVB reported $120 billion of investment securities, representing 55% of its assets, or more than double the average of all US banks. Further, three-quarters of their investment portfolio were in HTM securities, largely in U.S. Treasuries and mortgage-backed securities (MBS). While Treasuries and MBS are very safe investments from a credit risk perspective, they pose substantial interest rate risk. The weighted average duration of these investments was about six years, implying that if interest rates rose by 100 basis points (1%), the value of those securities would decline by 6%. In a low yield environment prior to the Fed’s rate hiking plan, the quest to ride the yield curve for income was very much in focus by banks including SVB.

 

[multivita-man]

LOL

Signature Bank de-banked Trump after Jan 6—now the regulators have shut them down

Good riddance to another shitcoin pawn shop. Crypto needs to die.

This has been the danger all along: not knowing how exposed financial institutions are to the crypto scam. It was a bad sign in 2021 when JP Morgan, despite Jamie Dimon's acknowledged lack of faith in crypto, basically said 'We're exploring crypto.'