This Sunday, the United States government announced some emergency measures to strengthen the banking system and insure deposits of Silicon Valley Bank and Signature Bank customers.
In a statement released by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), the organizations said that Starting Monday, March 13, taxpayers will have access to all their money. “They will not bear the losses associated with the bailout of Silicon Valley Bank,” they said.
The Silicon Valley Bank collapsed last Friday, March 10, after it failed to raise enough funds to cover losses from asset sales, given the uncertainty with which its clients withdrew all deposits. leaving the bank with only $1,000 million in negative balance.
From my side, Financial regulators closed this Sunday, March 12, Signature Bank of New York. To protect taxpayers, the banking institution announced last week that it had “limited digital asset-related deposit balances following the development of the industry,” it said.
Federal regulators also announced they were working on a buyer for SVB, with a foreign bank highlighted among the options. However, President Joe Biden was blunt when he said this Sunday that he “firmly committed to bringing those responsible for this disaster to full accountability and continue our efforts to increase oversight and regulation of the largest banks so that we are no longer in this position,” he said.
Treasury Secretary Janet Yellen stressed that they will not offer bailout to Silicon Valley bank investors, “with the new reforms that have been implemented, this means we are not going to do it again. But we care about depositors and we are focused on meeting their needs,” he said.
Similarly, the Federal Reserve also announced that it would have additional funds “for depository institutions eligible for help ensure that banks are able to meet the needs of all their depositors”, the message says.
Actions will be taken through new bank term financing program which, according to the three organizations, will offer loans for up to a year to “banks, savings associations, credit unions, and other eligible depository institutions that promise treasury bonds, agency debt, and mortgage-backed securities, and other assets qualifying as a guarantee “. was noted in the report.
Source: La Opinion
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