Janet Yellen, US Treasury secretary, speaks during a Financial Stability Oversight Council (FSOC) meeting at the Treasury Department in Washington, DC, US, on Friday, Dec. 16, 2022.
Ting Shen | Bloomberg | Getty Images
After regulators shuttered Silicon Valley Bank and seized its deposits Friday, U.S. Treasury Secretary Janet Yellen said Sunday that she has been working “to address the situation in a timely way,” but that a major government bailout is not on the table.
“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 that we’re not going to do that again,” Yellen told CBS’ “Face the Nation.” “But we are concerned about depositors and are focused on trying to meet their needs.”
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SVB’s spectacular implosion began late Wednesday, when it surprised investors with news that it needed to raise $2.25 billion to shore up its balance sheet. Reassurances from SVB’s CEO were not enough to stop the bank run, and depositors withdrew more than $42 billion by the end of the day Thursday, setting the stage for the second-largest bank failure in U.S. history.
The Federal Deposit Insurance Corporation (FDIC) said Friday that it will cover up to $250,000 per depositor and may be able to begin paying those depositors as early as Monday. But the vast majority of SVB’s customers were businesses that had kept far greater uninsured amounts at the bank, which sparked broad concerns about how people will be able to retrieve the rest of their funds.
Yellen said regulators are considering a wide range of options for SVB, including acquisitions.
“This is really a decision for the FDIC, as it decides on what the best course is to resolve this firm,” Yellen said.
Former FDIC Chair Sheila Bair said Sunday that finding a buyer for SVB is “the best outcome.”
“The problem is this was a liquidity failure, it was a bank run, so they didn’t have time to…
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