Barney Frank, board member of the bank and co-sponsor of Dodd-Frank, suspects an “anti-crypto” message behind the failure of the signature bank –
Barney Frank, a former member of the US House of Representatives from Massachusetts and a leading co-sponsor of the Dodd-Frank Act of 2010, offered his take on Signature Bank’s recent failure. In an interview, Frank stated that he believes regulators aim to “send a very strong anti-crypto message.” Frank, who also serves as a board member of Signature, said he was surprised by the financial institution’s demise.
Third largest bank failure in US history: Signature Bank’s demise left company executives bewildered
New York’s Department of Financial Services (DFS) regulators announced Sunday night that Signature Bank (SBNY) has closed and the Federal Deposit Insurance Corporation (FDIC) has been taken over as the bank’s receiver. The seizure aims to “protect depositors,” said DFS Superintendent Adrienne Harris. Unlike Silvergate Bank and Silicon Valley Bank (SVB), Signature’s collapse was somewhat confusing to some market observers, and it was the third largest bank collapse in the United States.
On Sunday evening, Superintendent Harris stated that Signature had approximately $110.36 billion in assets and total deposits of approximately $88.59 billion as of December 31, 2022. According to Barney Frank, a Signature board member and former US representative from Massachusetts, the bank’s failure came as a surprise to its executives. In a phone interview with CNBC, Frank explained, “We had no evidence of any problems until late Friday when we experienced a deposit rush that was entirely due to contagion from SVB.”
Frank explained that concerns began to spread last week when Signature’s customers began transferring deposits from the New York bank to larger financial institutions such as JPMorgan and Citigroup. Although the former politician saw “no real objective reason” for Signature’s seizure and closure, he suspected US regulators may have sent a message.
“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” Frank said. “We became the poster child because there was basically no bankruptcy.”
Frank also mentioned that withdrawals slowed on Sunday and Signature executives believed the situation was resolved. In addition, he claimed that the bank’s executives were trying to explore “all avenues” to solve the financial institution’s liquidity problems. Frank was a co-sponsor of the Dodd-Frank Act of 2010, which significantly changed the way US banking and the financial regulatory system currently operates. However, the policy framework has been partially lifted and some US banks are exempt from the Dodd-Frank rules.
What do you think of Barney Frank’s suspicion that regulators wanted to send an anti-crypto message by closing Signature Bank? Do you think this is a fair assessment or is there more to it? Do share your thoughts in the comment section below.
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Source: Crypto News Deutsch
