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Calls for TBAS to provide financial statement after U.S. bank failures

Rep. Larry Sanitoa

Pago Pago, AMERICAN SAMOA — The shutdown on Friday of Silicon Valley Bank followed by Signature Bank by the Federal Deposit Insurance Corporation (FDIC) has led to the call by one of the Tualauta faipule for the Territorial Bank of American Samoa (TBAS) to provide a financial statement.

Larry Sanitoa raised concerns during the House session yesterday citing that what’s happened to US banks is worrying and pointed out at least those banks are insured by the FDIC — however that is not the case with the Territorial Bank of American Samoa (TBAS).

 “My request is through the House Commerce Committee to hold a committee hearing with the Office of Financial Institutions (OFI) and TBAS given the volatility of our own banking situation here with TBAS. 

 “There are similar issues on what happened to the two US banks and the concerns with TBAS.

 “They should also provide financial statements and audit reports from TBAS as required by law to submit their annual financials to the governor and to the Fono in March every year,” said Sanitoa.

He said last year the Federal Reserve raised serious concerns about TBAS being substantially undercapitalized.

 “Given these concerns and the fact that we are not FDIC insured, we need to understand the financial status of the bank and what measures TBAS is taking to mitigate any potential run on the bank,” said Sanitoa.

Media outlets in the states reported that banking regulators closed New York-based Signature Bank on Sunday, the third largest failure in U.S. banking history, two days after authorities shuttered Silicon Valley Bank in a collapse that stranded billions in deposits.

The Federal Deposit Insurance Corporation (FDIC) took control of Signature, which had $110.36 billion in assets and $88.59 billion 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 U.S. Treasury Department and other bank regulators said in a joint statement.

Meanwhile, a leading credit-rating service has downgraded its confidence in Utah’s Zions Bank and the wider U.S. banking sector after the sudden collapse of Silicon Valley and Signature banks.

The Salt Lake City Tribune is reporting that Moody’s Investors Service announced late Monday it had placed the Utah-based bank holding company and five other regional banks under review for possible downgrades in some of their credit ratings, a move it said reflected “the extremely volatile funding conditions for some U.S. banks exposed to the risk of uninsured deposit outflows.”

For federal grants that require deposit into an FDIC insured facility, ASG uses the Utah-based Zions Bank. Bank accounts in an FDIC insured facility guarantee deposits up to $250,000.