Just two days after the collapse of Silicon Valley Bank (SVB) in the United States, a massive bank run amounting to approximately 13 trillion won occurred in the New York-based Signature Bank, which was subsequently closed. Customers quickly withdrew deposits via smartphone banking, following the same rapid path to bankruptcy as SVB within 36 hours of the crisis rumors emerging.
On the 13th (local time), Barney Frank, a former U.S. Congressman and director of Signature Bank, stated in an interview with CNBC, "We had no signs of trouble until late Friday when the deposit withdrawals began," revealing that over $10 billion (about 13 trillion won) was withdrawn in a single day on the 10th.
Frank explained that the bank run was purely a contagion effect from the SVB incident, as customers withdrew deposits due to the fear spreading from the SVB crisis and moved their funds to large banks such as Chase Bank and Bank of America.
Founded in New York State in 2001, Signature Bank rapidly expanded its business after entering the virtual asset industry in 2018. It established a 24/7 payment system operating 365 days a year for customers using virtual assets and attracted deposits totaling $16.5 billion (about 21.5 trillion won) related to digital assets.
Its swift entry into the cryptocurrency sector proved to be a double-edged sword. Over the past year, the Federal Reserve's aggressive interest rate hikes have adversely affected small and medium-sized banks heavily exposed to 'highly inflated' assets such as Silicon Valley's tech industry and cryptocurrencies, which became a negative factor for Signature Bank.
Following the announcement of voluntary liquidation by Silvergate, a virtual asset-specialized bank, on the 9th, and the sudden initiation of bankruptcy proceedings for SVB by U.S. financial authorities on the 10th, fear spread that Signature Bank might be 'next in line,' triggering the bank run.
As the situation escalated rapidly, Signature Bank's management explored all options, including raising additional capital and seeking potential buyers. Barney Frank reported that the deposit exodus seemed to subside over the weekend, giving the impression that the situation was stabilizing.
However, on the evening of Sunday the 12th, the New York State Department of Financial Services closed Signature Bank and appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver, following the same path as SVB.
According to the bank's disclosure documents, Signature Bank operated a total of 40 branches and held total assets of $110.36 billion and total deposits of $88.59 billion.
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