A few days after closing Silicon Valley Bank (SVB) and another bank, Signature Bank, US authorities announced far-reaching steps to protect bank deposits.
The US Federal Reserve, the Treasury Department and the Federal Deposit Insurance Fund announced on Sunday that SVB depositors will be able to access “all their funds” starting Monday. The taxpayer will not have to pay for this.
Authorities said in a joint statement that access to all deposits at the New York-based Signature Bank would also be possible. The bank also ran into problems and was closed by US authorities on Sunday.
In addition, the US Federal Reserve announced that it would provide additional funds to banks to meet the needs of depositors – this should also affect withdrawals. “We are taking decisive action to protect the US economy by increasing public confidence in our banking system,” officials said. The US banking system remains resilient and well-established.
The FDIC protects deposits up to $250,000 (about CHF 230,000) per customer and bank. According to a report by The Washington Post, the Federal Banks Act would allow the Deposit Insurance Fund to protect unsecured deposits if systemic risks threaten otherwise.
Biden: Hold those responsible accountable
On Sunday, US President Joe Biden promised to hold those responsible for bank failures accountable. “The American people and American companies can be confident that their bank deposits will be there when they need them,” he added. The Head of State announced that he would like to comment on the banking system on Monday.
US authorities closed the SVB office on Friday. The financial institution faced enormous difficulties as a result of billions in losses from the sale of securities. SVB is a bank that is not known to the general public, but it has played a major role in financing startups in the USA since the 1980s.
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