- Former congressman and board member of Signature bank, Barney Frank, details why the move to shut down the bank was unreasonable.
- Regulators are carrying out a sale process for the bank, and have assured customers that deposits will be made accessible.
In a recent interview with CNBC, Signature bank board member and former congressman, Barney Frank, has asserted that there was “no real objective reason” that justified the regulatory decision to seize Signature bank.
On the 13th of March, it was announced that Signature Bank (SBNY) had been seized by New York regulators in the country. The bank is most notably one of the largest U.S. banks to have recorded a massive collapse in recent times. The U.S. Federal Deposit Insurance Corporation (FDIC) also went ahead to seize a staggering $118 billion of Signature bank’s assets.
Regulators disclosed that the bank was seized in a bid to try to maximize the risk it posed, while also safeguarding depositors, as well as preserving the U.S. economy
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Barney Frank bares it all, revealing that U.S. regulators are pushing an “anti-crypto” agenda
Speaking to CNBC, Barney Frank explained that executives of the bank were alarmed at the decision made by the regulatory body. Barney stated that there was no danger in sight until the bank deposit run on Friday. While talking to CNBC, he said:
We had no indication of problems until we got a deposit run late Friday, which was purely contagion from SVB.
Founded in 2001, Signature Bank was a full-service commercial bank based in New York. Signature offered banking services across its 40 branches, in different parts of the country. In a regulatory filing, it was also disclosed that the bank closed 2022 with $110.36 billion and $88.59 billion in assets and deposits respectively.
A lot of pressure was placed on the bank over the past weekend, following the collapse of two other leading banks; Silvergate bank, and Silicon Valley Bank.
The FUD in the markets already resulted in investors and customers massively withdrawing their assets from other banks. Regulatory bodies also paid a lot of attention to the ongoing events, and as key players in the cryptocurrency market suspected, Banks with exposure to cryptocurrencies were prone to danger.
Barney Frank explained that the executives of Signature bank explored all the options, by going as far as trying to source more capital, in an attempt to contain the situation. However, the managers of the bank were relieved of their positions and shut down the bank for Load on Sunday. Barney Frank asserted:
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I think part of what happened was that regulators wanted to send a very strong anti-crypto message, we became the poster boy because there was no insolvency based on the fundamentals.
Regulators have since assured customers that banking services will continue smoothly and that their deposits will be made accessible, while regulators conduct a sale process for the bank.
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