Signature Bank also sank after Silicon Valley, did Cryptocurrency give a blow? - Newztezz Online


Monday, March 13, 2023

Signature Bank also sank after Silicon Valley, did Cryptocurrency give a blow?

US Signature Bank Collapse: There are signs of returning to the recession like 2008 in America. In less than a week, two big banks have sunk here. First the Silicon Valley Bank was shut down, now another tech friendly Signature Bank has also shut down.

Are conditions like 2008 Economic Recession happening in America ? If you look at the recent developments, the Silicon Valley Bank, which funded the first startups, drowned and now another tech friendly Signature Bank has also closed.

In both these cases, the Federal Deposit Insurance Corporation (FDIC) of America has assured depositors' money to be safe. FDIC gives insurance protection to people in America on deposits up to $ 2,50,000. In India too, the bank's customers get insurance cover on deposits up to Rs 5 lakh.

Bad condition of Signature Bank

New York based Signature Bank is a regional level bank. As of December 31, 2022, it had deposits of $ 88.59 billion. While its assets are worth $110.36 billion. According to the New York Department of Financial Services, the FDIC has taken over Signature Bank as soon as the bank's condition worsens.

On the other hand, America's financial agencies and the Ministry of Finance have said in a joint statement that depositors' money will be protected in Silicon Valley Bank and Signature Bank. The burden of loss in this will not fall on American taxpayers.

Cryptocurrency gave a blow to Signature Bank?

A significant share of Signature Bank's deposits is from the cryptocurrency segment. The phase of decline is going on in this segment for a long time. This is also affecting the share price of the bank. If you see in the last one year, the share price of Signature Bank has fallen by more than 75 percent.

A year ago, Signature Bank Share Price was at $289.78. Now after the news of the sinking of the bank, it has come down to just $70.

Cryptocurrency exchange Coinbase , which invested in Signature Bank, says that it has $ 240 million in cash stuck in Signature Bank. The company hopes that it will get this money back completely.

Situation like recession of 2008 is being created?

The closure of Silicon Valley Bank in the US is the second biggest blow after the 2008 economic recession. Then the company named Washington Mutual was drowned. Also, the banking firm Lehman Brothers had declared itself bankrupt.

The whole world had to bear the impact of this recession that started in America. People had lost their jobs on a large scale all over the world. Not only this, after this, the central banks of many countries had also made reforms in the rules related to the distribution of loans.

At the same time, America's veteran investor Bill Ackman has expressed the possibility of sinking of some more American banks in the coming times. Apart from this, the signs of recession like 2008 in America are getting stronger.

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