The announcement was made to coincide with a new loan program that the US Federal Reserve has pushed to avoid a banking crisis in the country due to a fall in the value of deposits accumulated by financial institutions due to a rapid rise in purchases.
Headquartered in New York, Signature specializes in providing banking support to law firms, from cash management to c
The announcement was made to coincide with a new loan program that the US Federal Reserve has pushed to avoid a banking crisis in the country due to a fall in the value of deposits accumulated by financial institutions due to a rapid rise in purchases.
Headquartered in New York, Signature provides specialized financial services to law firms, from managing cash deposits to checking accounts. His model has nothing to do with Silicon Valley Bank, which focuses on the segment of technology-start-ups. However, his crisis called into question the viability of other entities, especially regional ones, to solve the possible problems given in the case of rapid cash withdrawal, as happened in the case of SVB.
The New York Department of Financial Services, in coordination with federal regulators, who took control of SVB on Friday, is signing the closing service. Among the reasons he gave for making this decision, the supervisor indicated that he did so in order to “protect consumers and financial systems” from possible “systemic risk”, especially “from recent market events; and always in close collaboration with other states and federal regulators”.
On Friday, the federal government said it would guarantee all SVB deposits, both those below $250,000 and those above $250,000 (which would be paid back gradually as the bank’s assets were sold) from Monday. The objective was to spread panic among other small and medium-sized businesses and customers who were carrying large sums of money. What happened with Signature is a limited measure of success.
At the same time, the Federal Reserve announced the establishment of an emergency lending program, with the approval of the Treasury Department, to provide additional funds to banks in need.
Backed by $25 billion in cash from a fund initially designated for currency stabilization but now regularly used to support federal aid programs in times of crisis, the program will provide loans of up to one year to banks, savings banks, credit unions, and others. institutions have deposited in exchange for US Treasury bonds, the agency’s debt, backed by mortgage collateral.
