U.S. regulators have taken decisive action to safeguard the country's banking system by shutting down New York-based$Signature Bank (SBNY.US)$, becoming the third financial institution to be shuttered after the collapse of $SVB Financial (SIVB.US)$, and $Silvergate Capital (SI.US)$.
The move aims to protect public confidence in the industry, and ensure the banking system continues to protect deposits and provide access to credit to households and businesses, promoting strong and sustainable economic growth.
The regulators said depositors at Signature Bank will have full access to their deposits.
Benzinga reported on a short-thesis Friday, in which it was predicted that Signature Bank was the next bank to shutter.
Depositors of Silicon Valley Bank will be able to access their funds from March 13, a press release said, and no losses will be taken on by taxpayers.
Similarly, depositors of Signature Bank will be made whole with no losses to taxpayers, but shareholders and certain unsecured debtholders will not be protected, and senior management has been removed.
The U.S. banking system remains resilient and on a solid foundation," the Fed said, "in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry."
The Federal Reserve Board announced on Sunday that additional funding will be available to eligible depository institutions to help them meet the needs of their depositors.