Perhaps a bit late, Fitch Ratings has downgraded and withdrawn Signature Bank’s (SBNY) ratings.
Signature Bank was shuttered this past weekend by the New York Department of Financial Services. Signature, active in the crypto sector, suffered a similar shortcoming to Silicon Valley Bank as it held long-duration assets that had dropped in value as interest rates increased.
Fitch Ratings said that downgraded SBNY’s Long-Term Issuer Default Rating (IDR) to ‘D’ from ‘BBB+’ following its closure.
In addition, SBNY’s Short-Term IDR has been downgraded to ‘D’ from ‘F2’.
All assets and deposits have been transferred to Signature Bridge Bank N.A., a full-service bank that is operated by the FDIC as its receiver.
Fitch said it will no longer provide ratings or analytical coverage for Signature Bank.
Yesterday, federal regulators announced that it would backstop all deposits held at Signature Bank as well as Silicon Valley Bank. The dramatic move is designed to calm financial markets as some predicted widespread bank runs if the government had not acted quickly.
While the feds may have accomplished its goal, shares in regional banks sank today due to perceived operational risk.