Treasury Secretary Janet Yellen has distanced herself from the 2008 financial crisis and has assured that the nation’s banking system is “safe and well capitalized”. I attributed it to the Board’s rate hike policy.
The U.S. government denied bailout of Silicon Valley Bank (SVB) this Sunday and distanced itself from the 2008 financial crisis situation, while regulators are looking for buyers for the bank that stepped in on Friday.
On CBS’s “Face the Nation,” Treasury Secretary Janet Yellen assured the government would not rely on bank bailouts, but was concerned about SVB’s depositors, many of them start-ups. and said officials were “concentrated.” trying to meet their needs. “
Silicon Valley Bank debacle
The California-based bank said last Wednesday it would seek a capital increase to cope with financial troubles that dumped about $21 billion worth of investments and lost about $1.8 billion.
The announcement prompted many customers to withdraw their funds, after which regulators had to close banks due to lack of liquidity on Friday, after which the company’s share price plummeted, affecting the entire banking industry. Yes, other countries.
The Federal Deposit Insurance Corporation (FDIC) has announced that the SVB will reopen tomorrow Monday and that customers with insured deposits (up to $250,000 according to U.S. regulations) will be able to access their money, but professional According to the media, most exceed that figure.
Fear of ‘Ripple Effect’ to Remaining Banks
Fearing repercussions for U.S. rural banks, officials said in the program that the country’s banking system was “safe and well-capitalized,” and that the SVB’s collapse would be controlled by part of the Federal Reserve. inflation that it said was due to its policy of raising interest rates.
In this sense, he added, the regulator is considering “available options” to rectify the situation, including the purchase of SVB by another entity.
Bloomberg shows that the FDIC, which took control of banks on Friday, will begin the auction process this Saturday, accepting final bids this Sunday night, but could end without results.
If no buyer can be found, the CNBC channel reports, officials are considering other options, including protection mechanisms for unsecured deposits over $250,000 and Federal Reserve Bank services to support entities exposed to SVB. I reported.
Meanwhile, about 500 venture capital firms have joined an open letter after the regulatory intervention, pledging to support the SVB and urging partners to maintain their relationship with the bank if it is “acquired” and properly capitalized. We encourage you to “restart”.