Yellen: Yellen rules out bailout for SVB


WASHINGTON: US treasury secretary Janet Yellen on Sunday said she was working closely with banking regulators to respond to the collapse of Silicon Valley Bank (SVB) and protect depositors, but a major bailout was not being considered.
Yellen told CBS News that she had been working with regulators to “design appropriate policies to address the situation”, but declined to give details. “Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out…and the reforms that have been put in place means we are not going to do that again,” Yellen said. “But we are concerned about depositors and are focused on trying to meet their needs,” she added.
The collapse of the bank has raised concerns about runs on regional banks, and the ability of small businesses that banked with SVB to pay their employees. Yellen met with officials from the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency, and she and White House officials expressed confidence in the ability of banking regulators to respond.
Yellen emphasised that the US bank system was safe and well-capitalised, given new controls and capital requirements put in place after the 2008 financial crisis, and had been tested during the early days of the pandemic. “Americans can have confidence in the safety and soundness of our bank system,” Yellen said, adding that regulators wanted to ensure that the crisis did not spread to other banks. The FDIC stepped in Friday to protect the deposits of up to $250,000, but deposits over that amount – which accounted for 85% of SVB accounts – are at risk. Bloomberg


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