(USNewsMag.com) – Following the Signature Bank and Silicon Valley Bank’s collapse President Joe Biden spoke March 13 about what steps would be taken to assure confidence in the U.S. banking system, assuring those with money at Silicon Valley Bank that they would have access to their money.
Bank regulators spent March 11 and 12 coming up with a plan to show the public the financial system is sound. The Biden administration announced depositors’ funds would be backstopped. Biden stated that taxpayers were not paying for this but rather those who were responsible for the collapse. He stated there would be a full accounting of how the collapse of both banks occurred. The money for the relief for depositors would come from the fees banks pay into the Deposit Insurance Fund. Relief would not be extended to investors of Silicon Valley Bank and Signature Bank. Biden also stated that management of the banks would be fired.
The government has created the Bank Term Funding Program, a new lending program for emergencies that will make sure banks are able to meet their depositors needs.
Following its collapse March 12, Signature Bank’s operations are being run by the FDIC. Signature Bank’s collapse is the third largest in U.S. history.
California regulators shut down Silicon Valley Bank was shut down March 10 by California banking regulators after a rush to withdraw $42 billion after the FDIC was appointed as a receiver and concerns began to arise about its balance sheet.
Silicon Valley Bank, the 16th largest in the U.S., was founded in the 1980s. It provided financing to health care companies, venture capital firms as well as technology startups. Silicon Valley Bank said at the end of 2022 it had $151.5 billion in uninsured deposits, with U.S. depositors holding $137.6 billion of that amount.
Copyright 2023, USNewsMag.com