Albany, N.Y. (WBEN) - Just two days after the collapse of Silicon Valley Bank, New York State regulators closed down New York-based bank Signature Bank, which closed Sunday.
All depositors of Signature Bank and Silicon Valley Bank will be honored and made whole, with no losses being borne by the taxpayer, according to a joint statement from the U.S. Treasury Department and other bank regulators.
New York Gov. Kathy Hochul, in comments Monday, emphasized; "What the Federal Reserve and the FDIC did this weekend was important. They invoke powers that were conferred to them to be create a stopgap situation, to give out the message to all depositors that their deposits, even above the $250,000 limit, which is in the law with FDIC protections, that those above would also be protected. And what this did sent to ripple across the states, and also the country that deposits would be protected."
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"We want to make sure everyone knows the bank branches are open today," said the governor.
"This was even an area that could have been in doubt over the weekend. If again, we were not successful in persuading the federal government to include Signature Bank, and all of its customers and its protection. So the banks are open. Everything is fine, calm. The FDIC is in charge of the bank and they'll be communicating any further details about the future. This is not a bailout of government taxpayer dollars. This is simply using fees that are assessed on all banks by the FDIC in such a time they would need them. So that money is there. It's not from the taxpayers."
Are regional banks destined for similar risks right now?
Hochul addressed the issue in stating, "What happened over the weekend allowed for a level of stability that otherwise would not be there, but that does not mean that our financial services department is not aggressively engaged with all banks that could be viewed as vulnerable and working with them to stabilize them. That's really important to us. So we don't have any evidence that anyone else is in a situation like signature at this moment. But again, we want to make sure that there's not a ripple effect because of people getting anxious, start withdrawing, then that creates instability."