US swoops in to protect SBV deposit holders; Signature Bank also shuts down

As Washington rushed to prevent the fallout from the large institution’s failure from sweeping through the financial system, US federal regulators announced on Sunday (March 13) that another bank had been closed and that the government would ensure that all depositors of Silicon Valley Bank, which failed Friday, would be paid back in full.

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The New York Times quoting the Federal Reserve, Treasury, and Federal Deposit Insurance Corporation, stated that “depositors will have access to all of their money beginning Monday, March 13.” To allay taxpayer fears, the agencies stated that “the public would bear no damages related to the settlement of Silicon Valley Bank.”

The agencies also stated that they would reimburse depositors at Signature Bank, which the government revealed was closed down by New York bank regulators on Sunday. According to state officials, the action was made “in light of market occurrences, watching market trends, and coordinating closely with other state and federal regulators” to protect consumers and the financial system.

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Signature is the third bank to fall in less than a week. Last on Wednesday, Silvergate, a California-based bank, providing loans to cryptocurrency start-ups, declared it would halt operations and sell its assets.