The United States witnessed the closure of New York Signature Bank due to the perils of systemic instability.

On Sunday, New York’s Signature Bank was closed due to systemic risks. This was reported in a statement signed by US Treasury Secretary Janet Yellen, Federal Reserve System (FRS) Chairman Jerome Powell and Federal Deposit Insurance Corporation (FDIC) Chairman Martin Grunberg. The statement also says similar action has been taken against Silicon Valley Bank (SVB) in California.

As mentioned, all depositors of Signature Bank will have access to their deposits, just like in the case of SVB.

Earlier, it was reported that starting March 13, all Silicon Valley Bank depositors will also have access to their deposits.

The bankruptcy of SVB raised fears that other US banks could also run into trouble. Against this backdrop, investors began selling shares of similar SVB banks, such as First Republic, Signature Bank and Western Alliance. Many of these financial institutions cater to new customers and have similar investment portfolios to SVB.

SVB was shut down by California regulators on March 10, the largest U.S. bank failure since the 2008 financial crisis. All insured deposits were transferred from SVB to the Santa Clara National Deposit Insurance Bank . The collapse of the SVB is associated with an increase in the Fed’s key rate, which led to the depreciation of assets on the balance sheets of many financial institutions. According to the FDIC, total bank losses in 2022 amounted to $620 billion.