Bank Board Member and Dodd-Frank Co-Sponsor Barney Frank Suspects ‘Anti-Crypto’ Message Behind Signature Bank Failure

Barney Frank, a erstwhile subordinate of the U.S. House of Representatives from Massachusetts and starring co-sponsor of the 2010 Dodd-Frank Act, discussed his sentiment connected the caller nonaccomplishment of Signature Bank. In an interview, Frank stated that helium believes regulators aimed to “send a precise beardown anti-crypto message.” Frank, who besides serves arsenic a Signature committee member, explained that helium was amazed by the fiscal institution’s demise.

The Third-Largest Bank Failure successful U.S. History: Signature Bank’s Demise was Confusing to Company Executives

New York regulators from the Department of Financial Services (DFS) announced connected Sunday evening that Signature Bank (SBNY) was unopen down and the Federal Deposit Insurance Corporation (FDIC) took over arsenic the bank’s receiver. The seizure was intended to “protect depositors,” said DFS superintendent Adrienne Harris. Unlike Silvergate Bank and Silicon Valley Bank (SVB), Signature’s nonaccomplishment was somewhat confusing to immoderate marketplace observers and it was the third-largest slope nonaccomplishment successful the United States.

On Sunday evening, superintendent Harris stated that arsenic of December 31, 2022, Signature had astir $110.36 cardinal successful assets and full deposits of astir $88.59 billion. According to Barney Frank, a Signature committee subordinate and erstwhile U.S. typical from Massachusetts, the bank’s nonaccomplishment was astonishing to its executives. In a phone telephone interview with CNBC, Frank stated, “We had nary denotation of problems until we experienced a deposit tally precocious Friday, which was solely owed to contagion from SVB.”

Frank explained that interest began to dispersed past week arsenic Signature’s customers began transferring deposits from the New York slope to larger fiscal institutions specified arsenic JPMorgan and Citigroup. Although the erstwhile person saw “no existent nonsubjective reason” for Signature to beryllium seized and unopen down, helium suspected that U.S. regulators whitethorn person been sending a message.

“I deliberation portion of what happened was that regulators wanted to nonstop a precise beardown anti-crypto message,” Frank stated. “We became the poster lad due to the fact that determination was nary insolvency based connected the fundamentals.”

Frank besides mentioned that withdrawals slowed connected Sunday, and Signature executives believed the concern was resolved. Additionally, helium asserted that the bank’s elder unit attempted to research “all avenues” to resoluteness the fiscal institution’s liquidity issues. Frank was a co-sponsor of the 2010 Dodd-Frank Act, which made important changes to however U.S. banking and the fiscal regulatory strategy are presently conducted. However, the argumentation model has been partially repealed, and immoderate U.S. banks are exempt from the Dodd-Frank ruleset.

What bash you deliberation astir Barney Frank’s suspicion that regulators wanted to nonstop an anti-crypto connection by shutting down Signature Bank? Do you judge this is simply a just appraisal oregon is determination much to the story? Share your thoughts successful the comments conception below.

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