The U.S. government announced that all customers of the failed Silicon Valley Bank will have access to their funds on Monday morning, including deposits worth more than the $250,000 limit for Federal Deposit Insurance Corporation insurance
, according to recent regulatory filings by SVB. Additionally, the Federal Reserve announced that it was creating a new lending facility for the nation’s banks to protect bank customers and prevent other small and regional banks from collapsing.
SVB catered to tech startups, and many had millions or tens of millions on deposit at the bank—money they used to run their companies and pay staff. Silicon Valley Bank, founded almost 40 years ago, is the nation’s 16th-largest bank. Its collapse—the second biggest bank failure in U.S. history—sent shockwaves across the financial system and shook the tech industry. But Yellen on Sunday tried to reassure Americans that the fallout does not pose systemic risk. “America’s economy relies on a safe and sound banking system,” she said. “Americans need to feel confident that the banking system is safe and sound.
several of the biggest banks. “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 we are not going to do that again,” she said. “But we are concerned about depositors and are focused on trying to meet their needs.”
“We must make sure all deposits exceeding the FDIC $250k limit are honored,” Eric Swalwell, a Democratic congressman from California,on Twitter. “Banking is about confidence. If depositors lose confidence on the safety of their deposits over 250k then we are in trouble.”
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