Barney Frank, a previous member of the U.S. House of Representatives from Massachusetts and leading co-sponsor of the 2010 Dodd-Frank Act, discussed his viewpoint on the current failure of Signature Bank. In an interview, Frank mentioned that he thinks regulators intended to “send a very strong anti-crypto message.” Frank, who also functions as a Signature board member, described that he was shocked by the banks’s death.
The Third-Largest Bank Failure in U.S. History: Signature Bank’s Demise was Confusing to Company Executives
New York regulators from the Department of Financial Services (DFS) revealed on Sunday night that Signature Bank (SBNY) was closed down and the Federal Deposit Insurance Corporation (FDIC) took control of as the bank’s receiver. The seizure was planned to “protect depositors,” stated DFS superintendent Adrienne Harris. Unlike Silvergate Bank and Silicon Valley Bank (SVB), Signature’s failure was rather complicated to some market observers and it was the third-largest bank failure in the United States.
On Sunday night, superintendent Harris mentioned that since December 31, 2022, Signature had about $110.36 billion in properties and overall deposits of around $88.59 billion. According to Barney Frank, a Signature board member and previous U.S. agent from Massachusetts, the bank’s failure was unexpected to its executives. In a call interview with CNBC, Frank mentioned, “We had no indication of problems until we experienced a deposit run late Friday, which was solely due to contagion from SVB.”
Frank described that issue started to spread out recently as Signature’s clients started moving deposits from the New York bank to bigger banks such as JPMorgan and Citigroup. Although the previous political leader saw “no real objective reason” for Signature to be taken and closed down, he presumed that U.S. regulators might have been sending out a message.
“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” Frank mentioned. “We became the poster boy because there was no insolvency based on the fundamentals.”
Frank also pointed out that withdrawals slowed on Sunday, and Signature executives thought the circumstance was fixed. Additionally, he asserted that the bank’s senior personnel tried to check out “all avenues” to deal with the banks’s liquidity concerns. Frank was a co-sponsor of the 2010 Dodd-Frank Act, that made substantial modifications to how U.S. banking and the monetary regulative system are presently performed. However, the policy structure has actually been partly reversed, and some U.S. banks are exempt from the Dodd-Frank ruleset.
What do you consider Barney Frank’s suspicion that regulators wished to send out an anti-crypto message by closing down Signature Bank? Do you think this is a reasonable evaluation or exists more to the story? Share your ideas in the comments area below.
Thank you for visiting our site. You can get the latest Information and Editorials on our site regarding bitcoins.