|
Silicon Valley Bank collapse: Treasury, Fed and FDIC announce steps to ensure deposits will be paid in full
The Fed also announced it will make additional funding available.
ByElizabeth Schulze and Molly Nagle
March 12, 2023, 7:25 PM
2:32
Silicon Valley bank fallout
The Northern California bank has been shutdown by the FDIC as customers are left without access to their money for now.
The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation announced Sunday that they will make additional funding available to ensure all Silicon Valley Bank deposits, both insured and uninsured, will be paid in full.
"After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary [Janet] Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors," the said in a joint statement. "Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."
MORE: Senator says 'see what happens' before considering Silicon Valley Bank bailout
PHOTO: Treasury Secretary Janet Yellen attends a U.S. House Ways and Means Committee hearing in Washington, Mar. 10, 2023.
Treasury Secretary Janet Yellen attends a U.S. House Ways and Means Committee hearing in Washington, Mar. 10, 2023.
Evelyn Hockstein/Reuters
The Fed also announced it will make additional funding available to "to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors."
Silicon Valley Bank, the 16th largest bank in the country, failed on Friday and was taken over by the FDIC, after a run on the bank Wednesday and customers withdrew $42 billion of deposits by the end of Thursday.
SVB mostly served technology workers and startups, including some of Silicon Valley's biggest names, such as Roku.
PHOTO: Chairman Mark Warner speaks during a Senate Intelligence Committee hearing to examine worldwide threats at the U.S. Capitol in Washington, D.C., on March 8, 2023.
Chairman Mark Warner speaks during a Senate Intelligence Committee hearing to examine worldwide threats at the U.S. Capitol in Washington, D.C., on March 8, 2023.
Amanda Andrade-Rhoades/AP
The trio also announced Sunday a "similar systemic risk exception" for New York-based Signature Bank, "which was closed today by its state chartering authority," according to the joint statement. "All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer."
"Shareholders and certain unsecured debtholders will not be protected," the statement read. "Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law."
"I'm grateful that the Federal regulators have taken steps to do just that, and I hope that these actions will provide increased confidence in the stability of our banking system," New York Gov. Kathy Hochul said in a statement. "Many depositors at these banks are small businesses, including those driving the innovation economy, and their success is key to New York's robust economy."
Sen. Mark Warner, D-Va., told told "This Week" co-anchor Martha Raddatz earlier Sunday, "Let's see what happens today," pumping the breaks on a potential SVB bailout.
"I know I've been in conversations with the regulators, the administration, the Fed; the best outcome will be can they find a buyer for this SVB bank today before the markets open in Asia later in the day. That would be the best making sure that depositors -- remember that shareholders in the bank are going to lose their money, let's be clear about that -- but the depositors can be taken care of. And the best outcome will be an acquisition of SVB," he said.
"Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out, and we're certainly not looking. And the reforms that have been put in place mean that we're not going to do that again. But we are concerned about depositors and are focused on trying to meet their needs," Treasury Secretary Janet Yellen said on CBS' "Face the Nation" Sunday.
ABC News' Zunaira Zaki and Tal Axelrod contributed to this report.
| 
