Treasury Secretary: From Today SVB Depositors Can Have Access To Their Money.
By The Biden administration declared that Silicon Valley Bank depositors will have access to their money on Monday to rebuild public trust in the US banking system and safeguard the US economy.
Following recommendations from the Federal Deposit Insurance Corporation (FDIC) and Federal Reserve boards and the president, Treasury Secretary Janet Yellen on Sunday they approved enabling the FDIC to conclude its resolution of the Silicon Valley Bank in Santa Clara, California in a manner that completely protects all depositors, according to an official statement.
The Department of the Treasury, Federal Reserve, and FDIC’s joint statement mentions, “The depositors will have access to all their money starting Monday, that is, March 13. No losses associated with the resolution of the Silicon Valley Bank (SVB) will be borne by the taxpayer.”
“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole, ” it added.
In a joint statement of Treasury Secretary Yellen, Federal Reserve Chair Jerome Powell, and Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg reassured the public that the U. S. banking system is stable and secure.
“Those reforms combined with today’s action demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe,” it highlighted.
Yet, the interagency federal statement states that stockholders and certain holders of unsecured debt will not be protected.
“The senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law,” it said.
In order to ensure that banks can service the needs of all their depositors, the Federal Reserve Board also stated Sunday that it would make additional funding available to qualifying depository institutions.
The statement noted, “This step will ensure that the US banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.”
With the largest bank failure since the 2008 financial crisis, US regulators closed the 16th largest bank. The bank fell as technology workers and venture capital-backed companies withdrew their money, causing a run.
