A hearing to look into the failure of #SVB and #SignatureBank has been planned by the US House Financial Services Commission, and witnesses from the Federal Reserve and Federal Deposit Insurance Corporation are expected to give testimony on March 29.

Martin Gruenberg, the head of the FDIC, and Michael Barr, the vice chair for supervision at the Fed, are anticipated to testify. Representatives Maxine Waters and Patrick McHenry initiated the hearing. They said that this hearing will aid the committee in comprehending the causes and circumstances surrounding the failure of the banks.

Earlier this month, on March 10, Silicon Valley Bank collapsed as a result of a bank run by significant depositors. To protect the majority of uninsured depositors, the government intervened, though. As it closed on March 12, Signature Bank apparently had no solvency difficulties. When New York regulators intervened, they turned the bank's insurance operations over to the FDIC.

As a result of the bank failure, several MPs have suggested that exposure to #cryptocurrency enterprises may be to blame. Advocates for the space, meanwhile, have asserted that officials were attempting to "de-bank" cryptocurrency and #blockchain firms. A report on the Fed's oversight and control of Silicon Valley Bank is anticipated from Barr. The Securities and Exchange Commission and Department of Justice are allegedly both starting their own investigations into the decisions made by some of the bank's officials prior to its collapse.

It has been stated by the House Financial Services Committee that it intends to hold several hearings.

#Flagstar Bank has agreed to buy #SignatureBank in a deal that does not include the bank's #cryptocurrency deposits. Several pundits have accused the US government of advancing an anti-crypto agenda as a result of the decision.

The Federal Deposit Insurance Corporation (FDIC) announced a purchase deal with Flagstar Bank, a subsidiary of New York Community Bancorp, Inc. The Signature bank's "essentially all deposits and some loan portfolios" are included in the transaction.

Nevertheless, the acquisition excludes $4 billion in deposits from Signature Bank's crypto-related businesses. Instead, the FDIC stated that the deposits would be returned to clients immediately.

FDIC Receivership Signet

Together with Web3 business deposits, the agreement excludes Signature Bank's payment network, Signet. It was used by many Web3 businesses, including Circle, the creator of the stablecoin USDC.

An FDIC representative confirmed to Bloomberg that Signet will stay under the agency's authority and "will be subject to later arrangement."

Reuters report that the regulators requested the bidders to "give up all the #crypto operations" at the Signature bank. The FDIC later stated that this was false. Now, venture capitalist Nic Carter believes that the FDIC lied and that Reuters was correct. Carter is also certain that regulators have launched Operation Choke Point 2.0 in order to restrict crypto companies' access to banking.

The Signature Bank Has Reopened

Flagstar took over ownership of 40 Signature Bank locations on Monday. A subsidiary of New York Community Bancorp purchased $38.4 billion in assets and $12.9 billion in loans at a $2.7 billion discount. The agreement also excludes around $60 billion in debts that are still under #FDIC receivership. The FDIC acquired common shares with a potential value of up to $300 million as part of the arrangement.

The Federal Reserve liquidated the Signature bank on March 12 to "defend the US economy," however some believe the closure was for political purposes because the bank was solvent.

The #SVB and #SignatureBank bid deadline has been set by the #FDIC on March 17. Buyers must discontinue any cryptocurrency-related business.

Financial institutions interested in purchasing Silicon Valley Bank and Signature Bank before they go out of business have until Friday, March 17, according to FDIC officials.

Selling Silicon Valley Bank and Signature Bank completely is the aim. Consider selling some of the shares of the two banks if you can't sell it all.

To provide donors an advantage over private equity firms, only bidders with active bank charters are permitted to review banks' financials before submitting their offers.

According to rumors, the buyer of Signature Bank will have to consent to giving up all of the bank's cryptocurrency operations.

Regulators have highlighted that Signature Bank's closure is due to a crisis of confidence in its management, not connection with #cryptocurrency startups, despite the bank's reputation as one of two crypto-friendly banks. Its leadership nevertheless views it as a campaign to stop banks from working with cryptocurrency service providers.

Silicon Valley Bank, Signature Bank, and Piper Sandler, the company in charge of the auction, all promptly reacted to demands for comment, but the FDIC declined to speak on its behalf.

After authorities took over Silicon Valley Bank (SVB) on Friday and Signature Bank (SBNY.O) on Sunday, in a turbulent weekend that rippled throughout the whole global financial system, the latest auctions demonstrate how the FDIC is working in tandem to return lenders to the private sector.

Announcing the acquisition of the assets of Signature Bank, including its $36 billion in debt and subprime lending activities, is New York Community Bancorp. One of the largest purchases in the #banking industry in recent years, the deal is projected to be worth $38 billion.

New York Community Bancorp said in a statement that it will put a lot of effort into servicing subprime loans for clients of Signature Bank. The action is intended to boost the bank's position in the market for subprime loans, which has been expanding quickly in recent years.

The acquisition is anticipated to have a beneficial economic impact on New York City since it will increase local employment possibilities. The #FDIC has also said that, with the exception of digital bank accounts, #SignatureBank deposits would be accepted by subsidiaries of New York Community Bank.

John Smith, the CEO of New York Community Bank, expressed his joy about the purchase and said that it marks a significant turning point for the bank. He said,

“we are thrilled to announce the acquisition of Signature Bank’s assets, which will help us strengthen our position in the subprime lending market and expand our customer base.”

Customers of Signature Bank will gain from the purchase as they now have access to a greater choice of financial goods and services. The action is a component of New York Community Bancorp's plan to expand its operations and gain market share in the banking industry.

The transaction, which has received board approval from both New York Community Bancorp and Signature Bank, is anticipated to close before the end of the year. The two banks have guaranteed their clients that there won't be any interruptions in financial services throughout the transfer.

Hey everyone, it’s Firoz and I’m here to break down the massive announcement by the #Fed and US policymakers that just happened today.

You know I’m all about giving you the real value and cutting through the noise, so let me tell you what this means for you and your business.

The Fed just stepped in and rescued two major banks, #SVB and #SignatureBank , from going bankrupt. These banks were in trouble because they had a lot of bad loans and deposits that they couldn’t pay back.

The Fed did two things:

They made sure that all the depositors of these banks got their money back. That means if you had an account with SVB or Signature Bank, you don’t have to worry about losing your cash. You can access it starting Monday, March 13.

They created a new facility called Bank Funding Term Program (BFTP) to provide liquidity to banks under stress. That means if other banks face similar problems in the future, they can borrow money from the Fed by posting their bonds as collateral.

This is huge, because it prevents a domino effect of bank failures that could have crashed the whole financial system. #buildtogether

But here’s the catch:

The shareholders and certain unsecured debtholders of these banks will not be protected. That means if you invested in these banks’ stocks or bonds, you’re out of luck. You just lost your money. Sorry equity investors, do your homework.

The bonds that the banks post as collateral will be valued at par. That means the Fed will ignore the market value of these bonds, which could be much lower than their face value. This is a sweet deal for the banks, because they can get rid of their junk bonds and get cash in return.

The funding that the banks get from the Fed will be at 1-year OIS plus 10 bps spread on top. That means the banks will pay a very low interest rate to borrow money from the Fed, based on the market expectation of the Fed Funds rate plus a small premium. This is also a great deal for the banks, because they can get cheap funding for a long time.

So what does this mean for you?

Well, it depends on how you look at it.

On one hand, this is good news for the economy and the stability of the banking system. It shows that the Fed is willing and able to act swiftly and decisively to prevent a financial crisis. It also shows that the Fed is supportive of innovation and entrepreneurship, because SVB and Signature Bank are known for serving tech startups and crypto companies.

On the other hand, this is bad news for the moral hazard and the fairness of the market. It shows that the Fed is bailing out some banks that made bad decisions and took excessive risks. It also shows that the Fed is favoring some banks over others, by giving them preferential treatment and access to cheap funding.

So how do you feel about this?

Are you happy that your money is safe and that the economy is stable?

Or are you angry that some banks got away with their mistakes and that the market is rigged?

Let me know in the comments below.

And remember, this is not financial advice. This is just my opinion based on what I read and what I think. #crypto2023

If you liked this article, please share it with your friends and follow me.

#Tether transferred funds from US clients to Capital Union Bank, the issuer's Bahamas-based banking partner, via the Signet payments platform of #SignatureBank before the bank went out of business in March and was taken over by regulators.

Those with knowledge of the incident claim that Tether advised cryptocurrency users to pay for its #Stablecoins by sending dollars to its Bahamas-based banking partner Capital Union Bank Ltd.

Although the exact start date of the setup is unknown, it happened when Signature Bank was taken over by regulators last month, they claimed, requesting anonymity because the information was not made public.

Chief Technical Officer of Tether Paolo Ardoino answers:

"Tether had no direct or indirect contact with Signature."

Signet, which began in 2019 as a real-time payments network and was a critical piece of technology for many institutional clients using cryptocurrency, including the exchanges Coinbase and Kraken, is still in business even after regulators closed the bank.

The Wall Street Journal (WSJ) was recently accused of publishing and disseminating inaccurate information regarding Tether and its operations by the corporation. The #USDT issuer criticized the Wall Street Journal and other legacy media for writing negative articles about the company while applauding other cryptocurrency businesses that were some of the biggest financial disasters in history.

During times of market turmoil, like as the LUNA and FTX crises, Tether's stability was demonstrated. The company has demonstrated that it can continue to operate as its customers want it to by successfully processing over $20 billion in redemptions from market highs to lows.

This news is republished from https://coinaquarium.io/