Alexander Savenkov Barney Frank, who used to be a politician and the head helper of the 2010 Dodd-Frank act, talked about his viewpoint on Signature Bank’s recent falling apart. He said that he thinks the cops wanted people to understand that using cryptocurrency is something bad. Frank also serves on the board of Signature and was not expecting it to close down.
Barney Frank Weighs In On Unexpected Signature Bank Failure
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Sunday evening, regulators from the New York Department of Financial Services (DFS) said they shut down Signature Bank (SBNY). The Federal Deposit Insurance Corporation (FDIC) took over, so they could protect all of the bank’s depositors, explained DFS Superintendent Adrienne Harris. Many market observers were surprised that Signature was the third biggest bank failure in the USA and didn’t expect it to happen like Silvergate Bank or Silicon Valley Bank (SVB).
Superintendent Harris said on Sunday evening that at the end of 2022, Signature bank had around $110.36 billion of money and people’s deposits were about $88.59 billion. Barney Frank, a board member from Signature bank and also a former representative from Massachusetts said it was unexpected for them to fail as he added in an interview with CNBC over the phone that they didn’t recognize any issues until Friday when there was a sudden rush of people taking out their deposits due to SVB’s influence.
Last week, a lot of people started to worry about the future of Signature Bank in New York. Many customers transferred their money from this bank to larger and more well-known banks like JPMorgan and Citigroup. Frank, a former politician, thinks that US regulators have done something like sent out a warning message but he doesn’t feel it’s necessary for them to close down the bank.
According to Frank, regulators wanted to send a warning by targeting them because their company was not in trouble from the general point of view. They used him and his company as an example to demonstrate this message.
Frank said that on Sunday the bank’s withdrawals stopped, which meant the problem was solved. The bank’s high-level workers also tried hard to figure out how to fix the financial situation. Frank debated a law called ‘Dodd-Frank Act’ in 2010. This legal framework changed how American banks and finance regulatory systems work now. But parts of this Act have been taken away, so some U.S. banks don’t have to follow it anymore.
Barney Frank has an idea that the people in charge of making rules about finances wanted to send a message that cryptocurrencies are bad by closing down Signature Bank. Do you agree with him? Do you think there is more to this topic than what we are seeing? Comment your opinion and let us know what you think!
