US authorities unveiled sweeping measures Sunday to ease fears over the health of the banking system following the failure of Silicon Valley Bank, as regulators took over a second troubled lender.
People line up outside of the shuttered Silicon Valley Bank headquarters on March 10, 2023 in Santa Clara, California. Silicon Valley Bank was shut down on Friday by California regulators and was put in control of the US Federal Deposit Insurance Corporation. Justin Sullivan/ Getty Images/ AFP
Amid fears over the wider sector, President Joe Biden vowed to hold "fully accountable" the people responsible for "this mess" and said he would deliver remarks on Monday morning on maintaining a resilient banking system. The Fed also announced it would make extra funding available to banks to help them meet the needs of depositors, which would include withdrawals.
"Those reforms combined with today's actions demonstrate our commitment to take the necessary steps to ensure that depositors' savings remain safe."The FDIC move guarantees deposits—but only up to $250,000 per client and per bank. With the bank's future, and its billions in deposits up in the air, officials from the three agencies raced to craft a solution just hours before financial markets opened in Asia, and to avert a potential financial panic.
The BoE and the UK government stepped in after concluding that the "scale of the deterioration of liquidity and confidence means that... the position was not recoverable."Little known to the general public, SVB specialized in financing startups and had become the 16th largest US bank by assets: at the end of 2022, it had $209 billion in assets and approximately $175.4 billion in deposits.
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