After the Silicon Valley Bank failed, depositors will have quick access to all their money because the U.S. government took extraordinary steps on Sunday to stop a possible banking crisis.
Despite regulators’ attempts to find a buyer over the weekend, their efforts failed. In addition, Signature Bank, with over $110 billion in assets, failed and was seized on Sunday, making it the third-largest bank failure in U.S. history.
According to the statement, Secretary of the Treasury Janet L. Yellen, FDIC Chairman Martin J. Gruenberg, and Federal Reserve Board Chair Jerome H. Powell approved actions enabling the FDIC to complete the resolution of Silicon Valley Bank. “Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” a joint statement read. After getting advice from the FDIC and Federal Reserve boards and talking with the President, this was done to fully protect all depositors.
Executives from prominent Silicon Valley companies feared that customers would make runs on other financial institutions if the bank wasn’t rescued. The bank’s customers included a lot of wineries in California and tech startups that worked to fight climate change.
Rising interest rates were described as the core problem for Silicon Valley Bank by Yellen, who said many of its assets lost market value as rates climbed.
