In the last few days, SVB saw some troubled developments unravel. After the bank’s shutdown, the US regulators took control of its customer deposits on Friday.
Today, there has been a move that shall provide start-ups great relief. The US regulators, including the Federal Reserve, the Treasury, and FDIC or Federal Deposit Insurance Corporation, announced that depositors of the troubled SVB or Silicon Valley Bank shall have access to all their money from March 13. The US bodies said,
“No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,”
The Secretary of the Treasury- Janet L. Yellen, the Chair of the Federal Reserve Board- Jerome H. Powell, and the Chairman of FDIC- Martin J. Gruenberg, issued the statement. They stated that today they are taking action to protect the U.S. economy. This is by strengthening public confidence in the banking system. This present step shall show that the country’s banking system continues to perform well in its vital roles of protecting deposits and providing access to credit to all households and businesses in a way that promotes stronger and more sustainable economic growth.
The Federal Reserve is now on a path to help banks and ensure that it meets the needs of its depositors. The Federal Reserve announced it shall provide additional funds to eligible depository institutions.
The statement said that the U.S. banking system shall remain resilient. It is on a solid foundation. And it ensured better safeguards for the banking sector. Today, several old important economic reforms combined with present-day’s actions demonstrate their commitment to taking necessary steps to ensure that depositors’ savings will remain safe.
US claims deposits are protected, and Biden promises action after Silicon Valley Bank collapse
US President Joe Biden said Americans could be confident that their bank deposits would be present when needed. The president shall also comment on Monday to explain how the country shall maintain a resilient banking system.
Biden said he is firmly committed to holding those responsible for this downfall. This is to continue US efforts to strengthen the regulation of larger banks. This is so that they are not in this position ever again.
What it means to Americans
SVB, or Silicon Valley Bank, collapsed on Friday after a struggling 48 hours, making it the 2nd biggest bank failure after the 2008 financial crisis. The US regulators shut the bank down. They seized SVB’s assets on Friday. The sudden collapse of one of the biggest US banks stranded several billion dollars that belonged to companies, depositors, and investors.
After the US regulators shut down the Silicon Valley Bank Financial Group, they rolled out emergency measures on Sunday night to stop potential contagion.
The Silicon Valley Bank served mainly technology workers. It also served venture capital-backed companies. It included some of the banking sector’s best-known brands. The bank was a crucial lender, especially for early-stage businesses in the technology sector. In the meantime, an offer is made for the bank’s UK arm. A consortium of investors led by the Bank of London, a UK clearing bank, submitted a formal bid to the UK Treasury.