(San Francisco) US authorities have reached an agreement to buy out part of Signature Bank’s assets to another institution, according to a statement from the banking regulator, the FDIC, and are seeking a similar solution for Silicon Valley Bank (SVB ), according to Bloomberg.
The FDIC announced Sunday that Flagstar Bank, a subsidiary of New York Community Bancorp, will acquire deposits and loans from New York-based Signature Bank, the nation’s 21st bank, which closed on Sunday.
Flagstar will take over all of Signature’s 40 agencies and the bulk of $88.6 billion in deposits.
But about $60 billion in loans and $4 billion deposited online will remain under the control of authorities, according to a statement.
Last weekend, the Fed, the US Treasury and the FDIC intervened to prevent a wave of massive withdrawals at SVB from spreading to other small and medium banks.
To reassure the market, they had guaranteed that customers could withdraw all deposits from SVB and Signature Bank.
But regulators have so far failed to find a buyer for SVB, and are now considering dismantling the tech institution, according to a Bloomberg report.
The FDIC is now looking to sell the bank “in at least two parts,” according to news agency sources.
Contacted by AFP, the regulator declined to comment.
The banking sector has just gone through a dark week, with the recent bankruptcies of Silicon Valley Bank and Signature Bank causing a crisis of confidence in the sector.
The First Republic bank has seen its stock market valuation drop by 80%. Based in San Francisco, it is the 14th largest U.S. bank by asset size.
On Sunday, the financial rating agency S
The main banks of the country have indeed committed to deposit 30 billion dollars in its accounts.
This measure will “relieve the pressure on liquidity in the short term”, says S
The rating agency says it could downgrade the rating further if the bank fails to stabilize deposits.
