Monday, March 27, 2023
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The US Federal Reserve bailed out all of Silicon Valley’s customers

Financial authorities in the United States announced a rescue plan this Sunday that ensures depositors of bankrupt Silicon Valley Bank (SVB) will get their money back “in full” and US taxpayers will not pay for the collapse.

“Depositors will have access to all that money starting Monday, March 13,” the Treasury Department, the Federal Deposit Insurance Corporation and the Federal Reserve said in a joint statement, after several days in which they struggled not to downplay the impact. Did. of other financial institutions.

A similar systemic risk exception was also reported for Signature Bank, which was closed on Sunday by regulatory authorities after the SVB case was dropped.

The liquid-starved organization was shut down by the California Department of Protection and Innovation (DFPI) on Friday.

“Today, we are taking decisive action to protect the American economy by strengthening public confidence in the banking system. This step will ensure that the American banking system will continue to protect deposits and provide access to credit for households and businesses. continue to carry out its vital functions in a manner that fosters strong and sustainable economic growth, the statement said.

Finally, the Federal Reserve Board announced that it would make additional funding available to select depository institutions to help banks have the resources to meet the needs of all their depositors.

“The U.S. banking system remains resilient and sound, in large part because of financial crisis reforms that have improved safety for the banking industry. Those reforms, along with today’s actions, show the need to take the necessary steps to keep depositors safe. Demonstrate our commitment.

What is BLS?

Silicon Valley Bank (SVB) is a California-based bank specializing in the technology sector that has done business with money invested primarily in unheard of companies. Little known publicly, it was the 16th largest US bank by assets.

At the end of the 2012 fiscal year the bank had assets of some US$209,000 million and deposits of an estimated value of US$175,400 million. The regulatory authority’s intervention makes it the largest bank failure since the 2008 crisis and thus the sum of money and operations is the largest in United States history.

observer and afp

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