Yellen says Silicon Valley Bank won’t get bailout after collapse | Banking
U.S. Treasury Secretary Janet Yellen said on Sunday she would not bail out Silicon Valley Bank, which went bankrupt this week, but the Biden administration is working closely with regulators to help depositors hit by the banking crisis. said there is. Collapse of SVB.
Yellen said the situation was not consistent with the 2008 financial crisis, when the collapse of large financial institutions threatened to collapse the global financial system.
Yellen sought to allay concerns that the failure of a relatively small regional bank could impact the $23 trillion U.S. banking system.
“America’s banking system is really secure, well-capitalized and resilient,” she told CBS’s Face the Nation. “Americans can be confident in the safety and health of our banking system.
“Let us be clear that during the financial crisis there were bailed out investors and owners of large organized banks…and the reforms that have been implemented make it clear that we are not going to do it again. means.
“But we care about our depositors and are focused on meeting their needs.”
Citing anonymous sources, Reuters reported on Sunday that the U.S. government is expected to make a “significant” announcement of plans to strengthen SVB deposits and prevent wider fallout. .
“We don’t want problems that exist in one bank to spread to other healthy banks,” Yellen said.
Sudden failure of SVB California The bank, with assets worth $212 billion, primarily financed tech startups, spooking investors and triggering calls for regulatory intervention.
On Friday, the SVB was placed under custody of the Federal Deposit Insurance Corporation (FDIC), which guarantees a $250,000 deposit. However, by some estimates, many businesses and individuals will lose more than half of their deposits if they exceed it.
Mark Warner, a Virginia Democrat on the US Senate Banking Committee, said the SVB was “blinded” by higher interest rates. The bank run late last week, which saw him withdraw $42 billion on Thursday alone, was fueled by “several parties,” he told his This Week on ABC.
Warner said he is in discussions with regulators, the White House and the Federal Reserve. The best outcome would be to find a buyer for SVB assets before markets open in Asia late Sunday.
“It’s for the best,” he said, adding, “Bank shareholders will lose money. Let’s be clear about that. But depositors can be taken care of and the best outcome is SVB’s It’s an acquisition.”
Warner said, unlike in 2008, in Washington “ [SVB] should lose their money. Depositors were a different situation, but there are questions regarding moral hazard. “
Fox Business commentator Charles Gasparino murmured SVB depositors were said to “receive between 30% and 50% of their money.” [on] If there is no solution, it will be Monday and most of the rest of the time”.
White House Office of Management and Budget Director Shalanda Young said in her State of the Union address on CNN that the situation was being taken “seriously”, alleviating concerns that other regional banks might be affected. He said he is.
“We are on a better footing than before the financial crisis, mainly because of the reforms implemented after the financial crisis,” Young said, noting that the reforms since 2008 have “provided regulators with more tools and given me more tools. Our system is now on a stronger foundation and more resilient,” he added. .
Yellen’s refusal to bail out could heighten fears of a domino effect for other banks if regulators fail to find buyers for SVB assets. But current and former Fed officials in Washington said the collapse of the SVB did not justify federal intervention.
Former FDIC Chairman Sheila Bair said NBC’s Meet the Press SVB is a $200 billion bank in a $23 trillion banking industry.
“I find it difficult to say that this is systematic in any way,” she said.
Bloomberg reports that the Federal Reserve and FDIC are considering creating a fund to help troubled bank deposits.
The White House said on Saturday that Joe Biden spoke with California Gov. Gavin Newsom.
“Everyone is working with the FDIC to stabilize the situation as soon as possible,” Newsom said.
Risk and financial advisory firm Kroll said it was “unlikely for an SVB-style bankruptcy to affect a large bank.” But smaller community banks could face problems, and warned that “the risks are much higher if SVB’s uninsured depositors do not complete.”
Local banks that have plummeted in value since the SVB crisis began include Signature Bank, First Republic Bank, Western Alliance and PacWest, down 38%.
SVB’s failure ‘might be the first cockroach in the basement,’ says investment manager Fredric Russell Wall Street Journal. The failed bank reportedly had no risk manager in the months leading up to it.
“Banks are thrown into a dark pool of complacency and lower quality standards,” Russell said.
Billionaire hedge fund manager Bill Ackman also said uninsured deposits could be withdrawn from other banks if SVB’s depositors could not be protected.
“These withdrawals will drain liquidity from community, regional and other banks and begin the destruction of these vital institutions.” Ackman warned in a tweet thread.
“The government has been given about 48 hours to rectify a mistake that will soon be irreversible,” he wrote. “The unintended consequences of the government’s failure to guarantee his SVB deposit are enormous and serious and must be reviewed and addressed by Monday.Otherwise, please note the following. ”
Summarize this content to 100 words U.S. Treasury Secretary Janet Yellen said on Sunday she would not bail out Silicon Valley Bank, which went bankrupt this week, but the Biden administration is working closely with regulators to help depositors hit by the banking crisis. said there is. Collapse of SVB.Yellen said the situation was not consistent with the 2008 financial crisis, when the collapse of large financial institutions threatened to collapse the global financial system.Yellen sought to allay concerns that the failure of a relatively small regional bank could impact the $23 trillion U.S. banking system.”America’s banking system is really secure, well-capitalized and resilient,” she told CBS’s Face the Nation. “Americans can be confident in the safety and health of our banking system.“Let us be clear that during the financial crisis there were bailed out investors and owners of large organized banks…and the reforms that have been implemented make it clear that we are not going to do it again. means.“But we care about our depositors and are focused on meeting their needs.”Citing anonymous sources, Reuters reported on Sunday that the U.S. government is expected to make a “significant” announcement of plans to strengthen SVB deposits and prevent wider fallout. .”We don’t want problems that exist in one bank to spread to other healthy banks,” Yellen said.Sudden failure of SVB California The bank, with assets worth $212 billion, primarily financed tech startups, spooking investors and triggering calls for regulatory intervention.On Friday, the SVB was placed under custody of the Federal Deposit Insurance Corporation (FDIC), which guarantees a $250,000 deposit. However, by some estimates, many businesses and individuals will lose more than half of their deposits if they exceed it.Mark Warner, a Virginia Democrat on the US Senate Banking Committee, said the SVB was “blinded” by higher interest rates. The bank run late last week, which saw him withdraw $42 billion on Thursday alone, was fueled by “several parties,” he told his This Week on ABC.Warner said he is in discussions with regulators, the White House and the Federal Reserve. The best outcome would be to find a buyer for SVB assets before markets open in Asia late Sunday.”It’s for the best,” he said, adding, “Bank shareholders will lose money. Let’s be clear about that. But depositors can be taken care of and the best outcome is SVB’s It’s an acquisition.”Warner said, unlike in 2008, in Washington “ [SVB] should lose their money. Depositors were a different situation, but there are questions regarding moral hazard. “Fox Business commentator Charles Gasparino murmured SVB depositors were said to “receive between 30% and 50% of their money.” [on] If there is no solution, it will be Monday and most of the rest of the time”.White House Office of Management and Budget Director Shalanda Young said in her State of the Union address on CNN that the situation was being taken “seriously”, alleviating concerns that other regional banks might be affected. He said he is.“We are on a better footing than before the financial crisis, mainly because of the reforms implemented after the financial crisis,” Young said, noting that the reforms since 2008 have “provided regulators with more tools and given me more tools. Our system is now on a stronger foundation and more resilient,” he added. .Yellen’s refusal to bail out could heighten fears of a domino effect for other banks if regulators fail to find buyers for SVB assets. But current and former Fed officials in Washington said the collapse of the SVB did not justify federal intervention.Former FDIC Chairman Sheila Bair said NBC’s Meet the Press SVB is a $200 billion bank in a $23 trillion banking industry.”I find it difficult to say that this is systematic in any way,” she said.Bloomberg reports that the Federal Reserve and FDIC are considering creating a fund to help troubled bank deposits.The White House said on Saturday that Joe Biden spoke with California Gov. Gavin Newsom.”Everyone is working with the FDIC to stabilize the situation as soon as possible,” Newsom said.Risk and financial advisory firm Kroll said it was “unlikely for an SVB-style bankruptcy to affect a large bank.” But smaller community banks could face problems, and warned that “the risks are much higher if SVB’s uninsured depositors do not complete.”Local banks that have plummeted in value since the SVB crisis began include Signature Bank, First Republic Bank, Western Alliance and PacWest, down 38%.SVB’s failure ‘might be the first cockroach in the basement,’ says investment manager Fredric Russell Wall Street Journal. The failed bank reportedly had no risk manager in the months leading up to it.“Banks are thrown into a dark pool of complacency and lower quality standards,” Russell said.Billionaire hedge fund manager Bill Ackman also said uninsured deposits could be withdrawn from other banks if SVB’s depositors could not be protected.“These withdrawals will drain liquidity from community, regional and other banks and begin the destruction of these vital institutions.” Ackman warned in a tweet thread.”The government has been given about 48 hours to rectify a mistake that will soon be irreversible,” he wrote. “The unintended consequences of the government’s failure to guarantee his SVB deposit are enormous and serious and must be reviewed and addressed by Monday.Otherwise, please note the following. ”
https://www.theguardian.com/business/2023/mar/12/silicon-valley-bank-collapse-no-bailout-janet-yellen Yellen says Silicon Valley Bank won’t get bailout after collapse | Banking