The United States Federal Reserve issued on Sunday a statement together with the Treasury and the Federal Deposit Insurance Corporation (FDIC) stating that all depositors of the Silicon Valley Bank will be protected and “no losses will be borne by the taxpayer.” The regulators said this will apply to Signature Bank as well, which has also been closed. Depositors will have access to their funds starting on March 13. In addition, the Treasury said it will provide additional funding of up to $25 billion “to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.” The funds will be placed in a new Bank Term Funding Program (BTFP) and offered as loans of up to one year. The Fed stated that it “does not anticipate that it will be necessary to draw on these backstop funds.” It insisted that the capital and liquidity positions of the US banking system are strong and the US financial system is resilient. NB: So strong it needed a bailout!!
Yellen not considering bailout of Silicon Valley Bank
mUnited States Treasury Secretary Janet Yellen told CBS News on Sunday that a major bailout of the Silicon Valley Bank after its collapse on Friday is not something the US government is considering doing. In the interview, she discussed the possibility of how the regulators would respond to protect depositors and said that she is working on designing “appropriate policies to address the situation.” “Let me be clear that during the financial crisis, there were investors and owners of systemically large banks who were bailed out…and the reforms that have been put in place mean we’re not going to do that again,” she said. NN: Their was panic over the weekend and another bailout. SVB has the same exposure to rate increases as every other bank in the world. All they did was buy a little more time. You have seen this before. Soon the other shoe will drop.