Janet Yellen said in an interview on March 12 that U.S. regulators are working to address Silicon Valley Bank collapse, but not considering a major bailout.
It was reported that the U.S. Treasury Secretary Janet Yellen is working with regulators to fix Silicon Valley’s bank failures and protect investors, but she’s not considering big money.
Yellen said this in an interview with CBS News on March 12, saying that regulators are devising “appropriate plans to address the situation” in banks. He said:
“During the financial crisis, there was a system of big banks that invested in homeowners who were bailed out, but we don’t need it. And the changes that have been put in place show that we won’t do it again. But we care about the depositors and try hard to meet their needs. »
Regarding the fact that many accounts at SVB are not safe, Yellen said that the regulators “are well aware of the problems that depositors will have, many of them are small companies that employ people across the country But of course that’s a significant concern, and working with regulators to try to solve those problems.
Yellen raised the possibility that the failure of Silicon Valley will affect other US regional banks:
“Let me just say that we want to make sure that the problems in one bank do not affect the people who are healthy. And the aim is to maintain that the rule is always to ensure that the spread cannot happen.
The records of the Federal Reserve show that the small banks in the United States have $ 6.8 trillion in assets and $ 680 in equity as of February 2023. The wealth of technology will cause “the risk of running and many thousand small banks,” as reported by Cointelegraph.
Silicon Valley Bank is one of the top 20 banks in the United States, providing banking services for many crypto-friendly financial institutions. According to Castle Hill report, Web3 venture capitalists’ assets totalled more than $ 6 billion in banking, including $ 2.85 billion from Andreessen Horowitz, $ 1.72 billion from Paradigm and $560 of Pantera Capital.
According to Yellen, the Federal Deposit Insurance Corporation is considering “a number of available options,” including allowing foreign banks to acquire SVB. He said: “We are trying to resolve the situation in due course. California’s financial regulator shut down Silicon Valley on March 10 after announcing a major asset and stock sale to raise $2.25 billion in capital to boost operations.
The FDIC has appointed a receiver to protect the insured deposits. However, the FDIC only insures up to $250,000 per depositor, per institution and per class.
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