Federal Deposit Insurance Corporation said it moved everyone deposits and substantial assets signature bank SBNY To Signature Bridge Bank, NAA full-service bank that the agency will operate as it markets the institution to potential bidders.
becomes the third financial institution to close recently after the collapse of Signature Bank Silvergate Capital Corp. SI And Silicon Valley Bank SIVB,
According to the FDIC, a bridge bank is a chartered national bank that operates under a board appointed by the FDIC and assumes deposits and certain other liabilities and purchases certain assets of a failed bank.
The bridge bank structure is designed to “bridge” the gap between a bank failure and a time when the FDIC can stabilize the institution and implement an orderly resolution, it explained.
Read also: how to invest in startups
Depositors and borrowers will automatically become customers of Signature Bridge Bank, NA and will continue to have uninterrupted customer service and access to their funds through ATMs, debit cards and check writing as before. FDIC clarified That Signature Bank’s official checks will continue to clear.
“Loan customers should continue to make loan payments as usual,” it said.
The FDIC stated that all of the institution’s depositors would be made whole and no loss would be borne by taxpayers, but added that shareholders and holders of certain unsecured loans would not be protected.
Greg D. Carmichael has been appointed as the CEO of Signature Bridge Bank, NA. He most recently served as the President and CEO of fifth third bancorp,
Read further: Bailout: Fed rescues depositors amid SVB Bank collapse