The US Treasury Secretary says the collapse of Silicon Valley Bank is very different from the global financial crisis almost 15 years ago.
US Treasury Secretary Janet Yellen said that the federal government would not bail out Silicon Valley Bank, but is working to help depositors who are concerned about their money.
Ms Yellen, in a TV interview on Sunday, provided few details on the government’s next steps. But she emphasised that the situation was very different from the financial crisis almost 15 years ago, which led to bank bailouts to protect the industry. Silicon Valley Bank, based in Santa Clara, California, is the nation’s 16th-largest bank. It was the second-biggest bank failure in US history after the collapse of Washington Mutual in 2008. The bank served mostly technology workers and venture capital-backed companies, including some of the industry’s best-known brands.
Sheila Bair, who was the FDIC chairman during the 2008 financial crisis, recalled that with almost all the bank failures during that time, they “sold a failed bank to a healthy bank. And usually, the healthy acquirer would also cover the uninsured because they wanted the franchise value of those large depositors so optimally, that’s the best outcome”.
“I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation,” Ms Yellen said. “I can’t really provide further details at this time.”
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