US Treasury Secretary Janet Yellen on Sunday said that the federal government will not provide a bailout for Silicon Valley Bank's investors after the bank was abruptly shuttered, but said financial regulators are "concerned" about the impact to depositors and working to address their needs, media reports said.
"During the financial crisis, there were investors and owners of systemic large banks that were bailed out," Yellen said in an interview, CBS News reported.
"And the reforms that have been put in place means that we're not going to do that again. But we are concerned about depositors and are focused on trying to meet their needs."
California regulators shut down the Silicon Valley Bank on Friday after depositors rushed to withdraw money last week amid concerns about its balance sheet. The Federal Deposit Insurance Corporation (FDIC) was appointed receiver, and regulators are working to find a buyer for the institution, which ranked as the 16th-largest bank in the US before its failure.
The collapse of the 40-year-old bank, which catered to the tech industry, is the largest of a financial institution since the failure of Washington Mutual in 2008.
President Joe Biden spoke to California Governor Gavin Newsom about Silicon Valley Bank and the federal response on Saturday, and the FDIC spoke to members of the California congressional delegation late Saturday night.
Yellen said that in the wake of Silicon Valley Bank's failure, Treasury officials have been hearing from depositors, many of which are small businesses, and she has been working with bank regulators to "design appropriate policies" to address the situation, though she declined to provide further details.
The FDIC, she said, is likely considering a "range of available options" to stabilise the situation, which could include an acquisition by a foreign bank, CBS News reported.
"The American banking system is really safe and well-capitalised. It's resilient," she said. "In the aftermath of the 2008 financial crisis, new controls were put in place, better capital and liquidity supervision, and it was tested during the early days of the pandemic and proved its resilience. So Americans can have confidence in the safety and soundness of our banking system."
Still, Silicon Valley Bank's shutdown has prompted nervousness about whether it could trigger a run on other small and regional banks. Yellen, though, said financial regulators are working to prevent the fallout from spreading to other institutions, CBS News reported.
"We want to make sure that the troubles that exist at one bank don't create contagion to others that are sound," she said. "The goal always of supervision and regulation is to make sure that contagion can't occur."
"We're very aware of the problems that depositors will have," Yellen said, CBS News reported. "Many of them are small businesses that employ people across the country, and of course this is a significant concern and [we're] working with regulators to try to address these concerns."
Bhopal’s Muslims burst firecrackers in support of Waqf (Amendment) Bill
A large number of Muslims in Madhya Pradesh's capital, Bhopal, burst firecrackers on Wednesday to express their support for the Waqf (Amendment) Bill, which was presented in the Lok Sabha earlier in the day.
CPI(M)’s 24th party congress begins in Madurai, veteran leader Biman Bose hoists flag
The 24th Party Congress of the CPI(M) commenced on Wednesday in Madurai, Tamil Nadu, with senior leader Biman Bose hoisting the party flag at the historic Tamukkam Ground.
Vigil strengthened to curb illegal infiltration, human trafficking from B’desh: CM Saha
Tripura Chief Minister Manik Saha on Tuesday said that the state government has taken a series of steps to prevent illegal infiltration from Bangladesh, and the BSF as well as the state forces are on a strict vigil round-the-clock.
70 people convicted in 52 NDPS Act cases in Tripura: CM Saha
Tripura Chief Minister Manik Saha on Tuesday said that the state police have registered 52 cases and 70 people were convicted in the last three years under the Narcotics Drugs and Psychotropic Substances (NDPS) Act 1985.
NFR achieved key milestones in infrastructure expansion in 2024-25: Officials
Northeast Frontier Railway (NFR), which operates in the northeastern states and in seven districts of West Bengal and five districts of north Bihar, successfully completed and commissioned 1,141.388 Route Kilometers (RKM) of electrification in 2024-25,
Govt targets to make Tripura self-reliant in fish production: Minister Sudhangshu Das
The state fishery minister Sudhangshu Das on Tuesday said that the government has targeted to make the state self-reliant in fish production and accordingly the government has taken multifaceted initiative to boost fish production in the state.
Tourism to bring alternative economy for Tripura: Sushanta in Assembly
The state tourism minister Sushanta Chowdhury on Tuesday said that the tourism sector in the state will be the backbone of the alternative economy in the coming days. Economic and social development of the local people will be achieved through this industry, he added.
Rs. 24.46 Cr provides as aid to flood-affected farmers: Ratan
In response to an unstarred question by MLA Sudeep Sarkar, Agriculture Minister Ratan Lal Nath revealed comprehensive details about the arrangements made by the Farmers Welfare Department to assist flood-affected farmers in the state.