All deposits in the money house specializing in financing technology companies should be protected, the US Federal Reserve, the Deposit Protection Fund and the Treasury Department announced.
Two days after the California Silicon Valley Bank (SVB) went bankrupt, US authorities are trying to calm investors down with a series of measures. All deposits in the money house, which specializes in financing technology companies, are to be protected, as the US Federal Reserve (Fed), the deposit insurance fund FDIC and the Treasury Department announced on Sunday. Customers could access their money from Monday. The taxpayer should not have to bear any losses in connection with the liquidation of the Silicon Valley Bank.
In the US, deposits are actually only protected up to a limit of $250,000. The US authorities want to strengthen public confidence in the banking system by protecting deposits. The Fed also intends to provide banks with additional funding. This is to be realized via a new program that offers the institutes loans with a term of up to one year.
The bankruptcy of the SVB fueled fears of further collapses worldwide. The biggest collapse of a financial institution since the global financial crisis of 2008 caused crisis meetings of politicians and regulators, especially in the USA and Great Britain. Experts blame the strong interest rate hikes in the US for the problems of the SVB.
Another bank closed
US regulators closed another bank on Sunday. The New York-based Signature Bank will be closed, the responsible authorities said. Customers should get their money back in full. This would not impose any losses on the taxpayer. The US deposit insurance fund should act as the manager of the money house.
Deposits as of March 8 were about $89 billion. A senior US Treasury official said it was not a bailout of the two banks. It was about restoring confidence in the markets.
US Treasury Secretary Janet Yellen previously told CBS that she was working closely with banking regulators to find an answer and protect account holders. During the global financial crisis of 2008, the state jumped to the side of investors and shareholders of systemically important large banks. However, reforms enacted since then meant that such a move would not be repeated.