NEW YORK (Reuters) — State regulators closed New York-based Signature Bank, the third-largest failure in US banking history, two days after authorities shuttered Silicon Valley Bank in a collapse that stranded billions in deposits.

The Federal Deposit Insurance Corporation took control of Signature, which had $110.36 billion in assets and $88.59 in deposits at the end of last year, according to New York state’s Department of Financial Services.

All of the depositors of Signature Bank and Silicon Valley Bank will be made whole, and “no losses will be borne by the taxpayer,” the US Treasury Department and other bank regulators said in a joint statement. The FDIC established a “bridge” successor bank which will enable customers to access their funds today.

Signature Bank’s depositors and borrowers will become customers of the bridge bank, the FDIC said.

In March 2019, Signature announced it was prepared to do business with Bermudian-licensed fintech firms, unlike local banks that have shied away from the evolving sector.

David Burt, the Premier, announced at the time that the New York-based bank had agreed to provide US banking services for fintech firms licensed in Bermuda.

Signature was held out as the answer to Bermuda’s fintech banking problem.

Mr Burt, said at the time that Bermuda had 66 fintech companies incorporated on the island, but the absence of banking services for fintech companies was a problem.

Mr Burt said: “Banking for the fintech sector has been a considerable challenge around the globe. Banks have been reluctant to take on the risks of dealing with digital assets for fear that they may fall foul of global compliance regulations.

“Signature Bank’s willingness to consider Bermuda-licensed businesses for banking services is a significant vote of confidence in, and endorsement of, Bermuda’s efforts to create a leading, high-standard regulatory regime for fintech business.”

“Bermuda is setting itself apart by providing regulatory certainty combined with a world-renowned reputation for transparency and the highest standards of global compliance.

“Signature Bank’s endorsement showcases how Bermuda is competitively placed to advance the pace of the digitisation of global commerce as modern technology is applied to the highly regulated world of finance.”

Yesterday, the New York State regulator named former Fifth Third Bancorp chief executive Greg Carmichael as CEO of the bridge bank.

Employees appeared to gather at the company’s Manhattan headquarters for meetings on Sunday, ordering catering from Carmine’s, an Italian restaurant, and Starbucks coffee, according to a Reuters reporter on the scene.

People trickled out of the building after the news of the closure was announced.

Representatives for the lender did not immediately respond to a request for comment.

Investors were unnerved by the speed at which start-up-focused SVB, the 16th-largest lender in the US, was toppled by customer withdrawals.

The episode last week erased more than $100 billion in market value from US banks, prompting swift action from government officials over the weekend to try and restore confidence in the financial system.

The federal government also announced actions to shore up deposits and try and stem any broader fallout.

Signature was a commercial bank with private client offices in New York, Connecticut, California, Nevada and North Carolina, and had nine national business lines including commercial real estate and digital-asset banking.

As of September, almost a quarter of its deposits came from the cryptocurrency sector, but the bank announced in December that it would shrink its crypto-related deposits by $8 billion.

Signature Bank announced in February that its chief executive, Joseph De-Paolo, would transition into a senior adviser role in 2023 and would be succeeded by the bank’s chief operating officer, Eric Howell.

DePaolo has served as president and chief executive since Signature’s inception in 2001. The bank had a longstanding relationship with former US president Donald Trump and his family, providing Trump and his business with chequing accounts and financing several of the family’s ventures.

Signature Bank cut ties with Trump in 2021 following the deadly January 6 riots on Capitol Hill, and urged Trump to resign.

In a statement, New York governor Kathy Hochul said she hoped the US Government’s actions on Sunday would provide “increased confidence in the stability of our banking system”.

“Many depositors at these banks are small businesses, including those driving the innovation economy, and their success is key to New York’s robust economy,” she said.

Officials said shareholders and certain unsecured debtholders of Signature Bank, as well as those of Silicon Valley Bank, would not be protected, and that senior management of both banks have been removed.

Any losses to the FDIC’s Deposit Insurance Fund used to support uninsured depositors will be recovered by a special assessment on banks, as required by law, officials said.