Regulators shut down Signature Bank after its shares plunged in the wake of Silicon Valley Bank’s failure

New York-based Signature Bank was shut down by US regulators on Sunday, becoming the third failure in the country’s banking industry in less than a week.

According to a joint statement from the Federal Reserve, US Treasury and the Federal Deposit Insurance Corporation (FDIC), the lender “was closed by its state chartering authority.”

The statement from the regulators was issued to announce a new emergency program to protect depositors of failing banks. They explained that they would make a “systemic risk exception” for both Signature and Silicon Valley Bank (SVB), a tech and start-up focused lender that was shut down following a bank run last week, allowing the clients of both banks to have full access to their deposits.

“[SVB] depositors will have access to all of their money starting Monday, March 13… We are announcing a similar systemic risk exception for Signature Bank… all depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer,” the regulators said, adding that they would use the FDIC’s deposit insurance fund to fully protect all depositors, both insured and uninsured.

Signature was a big lender to the crypto industry. As of December 31, it had $110.4 billion in total assets and $88.6 billion in total deposits, according to a securities filing. New York state officials said the move to close the bank was made “in light of market events” in a bid to protect bank clients and the financial system. In the wake of SVB’s collapse last week, Signature also saw its shares plunge following deposits outflows.

The collapse of Signature is the third significant failure in the US banking industry within the past week. California-based, crypto-focused Silvergate was the first to announce its impending liquidation last Wednesday, followed by the SVB implosion on Friday – the largest US bank collapse since the financial crisis of 2008. Bank failures sparked concerns over the health of the entire US banking system, with many other lenders seeing their stocks plunge.