The collapse of Signature Bank, one of the 20 largest banks in the United States, has caused concern for many of its clients, including the city of Syracuse, which had deposited $56 million of taxpayers’ money at the bank.
New York regulators seized the bank last weekend, amid mounting panic over an anticipated bank run.
The city’s money was never at risk of being lost, as they had insurance that ensured their money would be returned by another bank if Signature could not make good.
However, the takeover of the bank by government regulators increased the risk that Syracuse officials might not be able to retrieve the money when they needed it. As a result, the city withdrew the $56 million earlier this week and most of it is parked at JPMorgan Chase, according to Brad O’Connor, the finance commissioner of Syracuse.
The episode has raised concerns from some city councilors and City Auditor Nader Maroun, who questioned why the city deposited money with a regional bank better known for serving start-up companies and cryptocurrency investors.
Despite the assurances of New York bank regulators that their money was safe at Signature and encouraged them not to withdraw it, Syracuse officials had already decided to pull their money out. City officials are now looking at other options for investing those taxpayer dollars.
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