WASHINGTON – Treasury Secretary Janet Yellen on Thursday tried to reassure markets and lawmakers that the federal government is committed to protecting U.S. bank deposits after the collapse of Silicon Valley Bank and Signature Bank over the weekend.
“Our banking system remains solid and Americans can rest assured that their deposits will be there when they need them,” Yellen said.
Yellen has been at the center of the federal emergency effort over the past week to repay deposits to account holders at two failing banks, California-based Silicon Valley Bank and crypto-heavy New York-based Signature Bank.
To prop up troubled banks facing a surge in cash withdrawals, the Federal Reserve also created a new lending program that Yellen said would provide “additional support” to the banking system. “This will help financial institutions meet the needs of all their depositors.”
“This week’s actions demonstrate our unwavering commitment to keeping depositors’ savings safe,” Yellen told senators.
Democrats and Republicans in Congress have largely backed the emergency measures, but as markets recover somewhat, lawmakers have begun to question whether the backstops will become a new norm.
“I’m concerned about the precedent for guaranteeing all deposits and market expectations going forward,” said Sen. Mike Crapo, R-Idaho.
This is an evolving story, please keep checking back for updates.
Source : www.cnbc.com