With eyes on the Silicon Valley Bank run and subsequent collapse in California, and the joint announcement by the Federal Reserve and the Treasury on Sunday night that the government will cover not only the insured $250,000 per customer, but ALL funds kept in the bank by customers, another bank on the east coast of the United States is also in serious trouble.

The Signature Bank is an FDIC-insured, New York state-chartered commercial bank with about $110.36 billion in total assets and $88.59 billion in total deposits as of December 31, 2022.

To safeguard depositors, the New York Department of Financial Services (DFS) has seized Signature Bank in accordance with Section 606 of the New York Banking Code, as announced today by Superintendent Adrienne A. Harris. The DFS designated the Federal Deposit Insurance Corporation (FDIC) as the bank’s receiver.

DFS maintains frequent touch with all regulated entities in response to market events, monitors market trends, and works closely with other state and federal regulators to protect consumers, assure the health of the firms we supervise, and maintain the integrity of the global financial system.

Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg have just issued the following statement about the collapse of west coast banks:

Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.

After receiving a recommendation from the FDIC and Federal Reserve boards and consulting with the President, Secretary Yellen approved actions allowing the FDIC to complete its resolution of Silicon Valley Bank in Santa Clara, California in a manner that protects all depositors to the fullest extent.

Starting on Monday, March 13, depositors will have full access to their funds. The taxpayer will bear no losses related with the settlement of Silicon Valley Bank.

No more explanation has been provided as to how the government pays losses without utilizing public funds. On the government taking control of the New York bank as well, the statement continued:

We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

Not covered are shareholders and certain unsecured debtholders. Moreover, senior management has been dismissed. As required by law, any losses to the Deposit Insurance Fund to protect uninsured depositors will be repaid by a special levy on banks.

The Federal Reserve Board said on Sunday that it will make additional money available to qualifying depository institutions in order to ensure that banks can satisfy the demands of all depositors.

The ties between the failing New York bank and former President Donald Trump are recognized as everyone watches the dominoes fall.

Signature Bank in New York once had a close business relationship with the Trump family, with Ivanka serving on the bank’s board of directors from 2011 to 2013. However, in response to the January 6, 2021 events at the Capitol, the bank severed ties with President Trump, closed his accounts, and demanded his resignation.

Two years later, Signature Bank failed and was seized by the government.

Flashback to January 12, 2021 via Real Estate Weekly (excerpt):

For the first time in its 20-year history, prominent real estate lender Signature Bank has issued a comment on the nation’s politics with a call for President Donald Trump to resign. “We have never before commented on any political matter and hope to never do so again,” said the New York-based bank led by Joseph J. DePaolo. “However, as Americans we are deeply, deeply saddened by the rioting and insurrection which took place in the most sacred of American institutions, our United States Capitol.”

As well as closing Trump’s personal accounts at the bank, Signature Bank demanded Trump’s resignation for fanning the flames of hate that led to last week’s attack on the Capitol Building by thousands of Trump supporters. “We witnessed the President of the United States encouraging the rioters and refraining from calling in the National Guard to protect the Congress in its performance of duty.

“At this point in time, to ensure the peaceful transition of power, we believe the appropriate action would be the resignation of the President of the United States, which is in the best interests of our nation and the American people.”

The freshly released film of the events on January 6 vindicates the Trump campaign, while Signature Bank struggles.