After SVB, Signature Bank latest casualty of turmoil in banking sector

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.”

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.

New York banking regulators appointed the Federal Deposit Insurance Corporation (FDIC) as receiver for later disposition of the bank's assets. 

Signature Bank reported deposit balances totaling $89.17 billion as of March 8. As of 31 December, it had approximately $110.36 billion in assets, according to New York state’s Department of Financial Services. 
 

The turmoil following the collapse of Silicon Valley Bank continued to spread Monday, with First Republic Bank shares falling a record 73 per cent as of 9 pm IST. Trading was halted after the declines, which accelerated despite a statement from the bank that it had more than $70 billion in unused liquidity to fund operations from agreements that included the Federal Reserve and JPMorgan Chase.

- Agencies

Oil prices fell $4 on Monday along with equities as the collapse of Silicon Valley Bank raised fears of a fresh financial crisis, but a recovery in Chinese demand provided support.

Brent crude futures were down $3.96, or 4.8 per cent, to $78.82 per barrel by 1220 GMT. West Texas Intermediate US crude futures (WTI) fell by $3.86, or 5 per cent, to $72.82 a barrel.

Brent hit its lowest levels since early January while WTI touched prices not seen since early December.

Fears of contagion from the failure of Silicon Valley Bank led to a selloff in US assets at the end of last week, while state regulators closed New York-based Signature Bank on Sunday.

In recent days a weaker dollar, which makes oil cheaper for holders of other currencies, has lent some support to prices.

- Bloomberg