Former Democratic congressman from Massachusetts Barney Frank suspects Signature Financial institution might have been taken over by regulators to ship an “anti-crypto message.”
The New York State Division of Monetary Providers shuttered Signature on Sunday after prospects withdrew $10 billion value of deposits on Friday.
The state regulator appointed the Federal Deposit Insurance coverage Company (FDIC) to run a “bridge financial institution” holding all of Signature’s belongings.
The FDIC plans to market the monetary establishment to potential bidders and says it should defend all of Signature’s depositors, noting that the financial institution’s prospects all nonetheless have entry to their cash.
Frank, who can be a Signature board member tells CNBC that the financial institution’s points had been “purely contagion” from the implosion of Silicon Valley Financial institution final week.
Frank additionally claims there was “no actual goal motive” regulators wanted to take over the crypto-friendly monetary establishment.
“I feel a part of what occurred was that regulators needed to ship a really robust anti-crypto message. We turned the poster boy as a result of there was no insolvency based mostly on the basics.”
Over the weekend, the Federal Reserve and Treasury Division introduced they’d make as much as $25 billion obtainable as loans for monetary establishments to alleviate liquidity pressures and meet the wants of their depositors.
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