All Silicon Valley Bank clients will be protected and have access to their funds, the US federal government says, in a bid to prevent more bank runs.
The Treasury Department, Federal Reserve and FDIC announced steps on Sunday designed to protect the bank’s customers and prevent more bank runs. “This step will ensure that the US banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth,” the agencies said in a joint statement.
The move will not lead to losses by American taxpayers and all deposits will be made whole, the statement said.“Today we are taking decisive actions to protect the US economy by strengthening public confidence in our banking system,” the statement said. “This step will ensure that the US banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.
The officials also said that depositors of New York’s Signature Bank, which was closed Sunday by the New York state financial regulator, would be made whole at no loss to the taxpayer.Signature’s shareholders and unsecured debtors will not be protected, and management has been removed, the officials said.
By the end of that month, use of the Fed’s discount window facility shot up to more than $US50 billion .
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