U.S. Government Protecting Depositors of Silicon Valley Bank

Published:

A man walks by the headquarters of Silicon Valley Bank on March 10, 2023 in Santa Clara, California.

Liu Guanguan | Getty Images

The U.S. government has come up with a plan to secure depositors of Silicon Valley Bank, a critical measure to avoid a potential panic around the bank’s collapse.

The Treasury Department and Federal Reserve announced Sunday that customers of both SVB and Signature Bank in New York, which has been shut down, would have full access to their deposits beginning Monday.

A joint statement from Fed Chair Jerome Powell, Treasury Secretary Janet Yellen, and FDIC Chair Martin Gruenberg declared that there would be no bailouts and no taxpayer costs involved in the new plans. Shareholders and some unsecured creditors will not be safeguarded.

“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” the statement read.

The Federal Reserve has also set up a Bank Term Funding Program that can provide loans up to one year to banks, savings associations, credit unions, and other institutions. Those that accept the funding must pledge high-quality collateral such as Treasurys, agency debt, and mortgage-backed securities.

The Fed

Related articles

Recent articles