# What is Signature Bank?
Signature Bank is an American specialty bank, founded in 2001 and headquartered in New York City.
In addition to traditional banking, Signature Bank's services include fund transfer and custody services related to cryptocurrencies, which are digital assets. Signature Bank has the distinction of being the financial institution with the closest ties to the cryptocurrency market, along with the aforementioned SVB and Silvergate Bank.

# Reasons for Signature Bank's bankruptcy

Signature Bank's total assets are approximately $146 trillion, and this large bank became insolvent in three days as a ripple effect of SVB's bankruptcy. Silicon Valley Bank (SVB) was closed by California financial authorities on the morning of March 10, 2023, about two days after a bank run (massive deposit withdrawal), and Signature Bank also experienced a bank run around March 10, 2023, and was closed on the evening of March 12, 2023. The U.S. Treasury, Federal Reserve, and Federal Deposit Insurance Corporation issued a joint statement on Signature Bank on March 12, 2023, stating that it was deemed to pose "systemic risk" and that it was closed because it "posed similar risks to SVB." While the decision was made to prevent the negative impact of failed banks on financial markets as a whole, and to protect depositors' assets, there are growing concerns about a possible financial crisis. However, the U.S. Treasury Department decided to fully subsidize the deposits of failed SVB and Signature Bank on the 12th, and the Fed introduced a new emergency lending limit for banks, so it is believed that the situation will stabilize faster than initially thought.

# Scale and impact of bank runs

In the case of SVB, the announcement of a $2.25 billion capital increase plan to cover losses on March 8, 2023, caused SVB's stock price to plummet, and Silicon Valley startup entrepreneurs, SVB's customers, quickly withdrew their deposits with their smartphones in droves, with $42 billion (approx. KRW 56 trillion) withdrawn on March 9 alone, and Signature Bank reportedly lost more than $10 billion (approx. KRW 13 trillion) in deposits on March 10, 2023, alone, as a psychological effect of SVB's bankruptcy.

These recent events show that unlike bank runs in the past, recent bank runs can be easily triggered by a smartphone, causing a bank to fail in just a few hours.

# Various views on the bankruptcy of Signature Bank

President Biden pointed to lax financial oversight and said that bank executives should be held accountable for the risks that led to these failures that adversely affected the market as a whole. He argued that when banks take excessive risks and fail, regulators should be able to claw back the compensation bank executives received, impose huge fines, and prevent them from ever working in the financial industry again. He called on Congress to expand the powers of the Federal Deposit Insurance Corporation (FDIC) so that it can also seize bank executives' profits and hold them accountable.

On the other hand, Kathy Wood, president of Ark Investment, pointed to the Federal Reserve's (Fed) aggressive tightening as being responsible for the bankruptcies of Silicon Valley Bank (SVB) and Signature Bank, among others.

#Further analysis of the chain of bank failures

Although the U.S. has declared depositor protection for the cascading bankruptcies of these banks, shareholders and other creditors are not protected, and as SVB has been providing services such as venture capital and private equity to startups, it is undeniable that it will have a cascading negative impact on the startup ecosystem in the future.

In the cryptocurrency market, SVB's bankruptcy recently caused a depegging phenomenon that saw the price of USDC, the second most traded dollar-based stablecoin, temporarily drop from $1 to $0.88, as it became known that 8% of USDC's total holdings were deposited with SVB. As such, the ripple effect of the financial health of a bank that is so closely tied to the cryptocurrency market can affect the entire cryptocurrency market. It is also important to keep in mind that price fluctuations in stablecoins can adversely affect the entire market, as we have seen in the past with Luna and Terra.