Regulators seize Signature Bank in third-largest US bank failure

In a startling turn of events, Signature Bank, the third-largest bank in the United States, has been seized by regulators after failing to meet capital reserve requirements. The bank, which had been struggling due to mounting losses from bad loans, had been under increased scrutiny from regulators in recent months.

The seizure of Signature Bank is the latest in a string of bank failures in the US, with regulators citing concerns over declining deposit growth, rising loan losses, and weakening capital levels. Customers of the bank, who had already seen a reduction in services and a suspension of loan applications, will now be forced to find new banking arrangements.

News of the bank’s failure has been felt strongly in Silicon Valley, where many start-ups and small businesses had deposited funds with Signature Bank. However, regulators have pledged to ensure that SVB, a bank frequently used by small businesses and tech start-ups, will not fail and that all customers will be made whole.

Regional banks across the country have been seeing a flight of deposits to larger, too-big-to-fail megabanks, leading to closures and mergers. Some Nebraska bankers weighed in on the topic, expressing concern about the trend and the potential impact on small communities.

The closure of Signature Bank has also prompted questions about who will pay for the bank’s restoration efforts. Initial reports suggest that the burden will fall on taxpayers, as regulators have yet to identify any private entities willing to invest in the bank’s future.