Source: Wall Street
The regulator of New York State said that Signature Bank failed to provide reliable data, and its failure had nothing to do with cryptocurrency. It is a national model for the supervision of cryptocurrency. Barney Frank, the director of the bank, said that the regulators wanted to send a strong signal against cryptocurrency. The media said that the bank lost 20% of its deposits on the first day of last week, about 17.8 billion US dollars. Frank said that by the morning of last Sunday, the bank's deposit outflow had stabilized.
After closing and taking over Signature Bank last Sunday, the financial regulator of New York State recently disclosed what caused the failure of this regional bank headquartered in the state.
On Tuesday, March 14 local time, the New York State Department of Financial Services (DFS) issued a statement, Signature Bank "failed to provide reliable and consistent data, which caused a serious crisis of trust for the bank leadership". The reason why it decided to take over the bank and transfer it to the Federal Deposit Insurance Corporation (FDIC) "is based on the current situation of the bank and its ability to conduct business safely and steadily on Monday."
After the flash bankruptcy of Silicon Valley Bank last Friday, Signature Bank was closed last Sunday, creating the third largest bank bankruptcy in American history after Silicon Valley Bank. On Tuesday, some media quoted insiders as saying that before the bank's collapse, customers swarmed to withdraw money last Friday, accounting for about 20% of the bank's deposits in total. On Friday, 20% of the bank's deposits were lost.
DFS said on Tuesday that throughout the weekend, Signature Bank had "a large number of requests for withdrawal have not been processed, and are still increasing". Adrienne Harris, director of DFS, said: "Since we witnessed a large amount of capital outflow on Friday, we know that we have to take action on the weekend so that they (banks) may open on Monday."
DFS also explained that the decision to close Signature Bank "has nothing to do with cryptocurrency". The bank "has been promoting cryptocurrency activities that have been well regulated for many years and is a national model for supervision in this field."
Wall Street has noticed that this is inconsistent with the recent explanation of Barney Frank, a director of Signature Bank and a former US congressman. Frank has been involved in the introduction of the Dodd Frank Act, a regulation to strengthen supervision after the 2008 financial crisis.
Frank told the media on Monday that he believed that the failure of Signature Bank was partly due to the fact that "regulators want to send a very strong anti cryptocurrency message". "We have become a model, because there is no bankruptcy from the fundamental point of view."
The above media news on Tuesday did not disclose how much money Signature Bank has left after the crazy run. The bank disclosed last Thursday that it had about $89.2 billion in deposits as of last Wednesday, March 8. It is estimated that if the 20% withdrawal is true, the bank will lose $17.8 billion on Friday.
$17.8 billion is almost four times the cash held by Signature Bank. The bank disclosed last week that it had US $4.54 billion in cash and US $26.4 billion in "liquid negotiable securities" on its balance sheet.
On Tuesday, Frank said in response to the DFS statement that he was surprised that the regulator said it had nothing to do with cryptocurrency. "I think this is a factor. I am confused about the reason for the closure."
Frank said that as far as he knew, by the morning of last Sunday, the outflow of deposits from Signature Bank had stabilized. Moreover, the bank will be able to obtain funds from the discount window. "I still believe that if we announced these two policies on Monday (at that time) and then opened our business, we would be in good condition, and of course the function would be the same."
Not only the regulator of New York State, but also some videos that were wildly circulated on the Internet have aroused netizens' doubts about Signature Bank. Genevieve Roch Detector, CEO of Grit Capital, a media company in the financial industry, shared some videos on Tuesday, saying that the management of the bank spent millions of dollars to produce music videos and TV programs related to itself, and asked what was the accident of such bank failure.
Roch Detector said that people who have worked in the bank for many years disclosed that the management is basically the same as the TV program The Office, and they waste money on imitating videos.
Risk tips and disclaimers
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