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Everything You Need To Know About The Closure Of Signature Bank
On March 13, 2023, the closure of New York-based Signature Bank was announced by state regulators, just days after California authorities shut down Silicon Valley Bank. The closure of Signature Bank is a significant development that has sent shockwaves throughout the banking industry and the broader financial system.
In this article, we will delve deeper into the reasons behind the closure of Signature Bank, the potential implications for depositors, shareholders, and the broader financial system, and what regulatory measures are being taken to address the situation.
Reasons Behind The Closure of Signature Bank
Signature Bank was a commercial bank with private client offices in New York, Connecticut, California, Nevada, and North Carolina. The bank had nine national business lines, including commercial real estate and digital asset banking.
As of September 2022, almost a quarter of Signature’s deposits came from the cryptocurrency sector. However, the bank announced in December 2022 that it would shrink its crypto-related deposits by $8 billion. This suggests that the bank was aware of the potential risks associated with banking in the cryptocurrency industry and was taking steps to manage this risk.
