Treasury Secretary Janet Yellen said on Sunday she was working closely with banking regulators on the collapse of Silicon Valley Bank (SVB) to protect depositors, but a bailout of the bank was not not considered.
Yellen told CBS she was working with regulators to “develop appropriate policies to deal with the situation” and that reforms since the 2008 financial crisis meant a repeat of the bank’s bailouts was unnecessary. .
“But we care about contributors and strive to meet their needs,” Yellen said.
The startup-focused bank’s collapse raised concerns about regional bank failures and the ability of small businesses that held SVB accounts to pay their employees.
In a meeting with representatives from the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, Yellen and White House officials expressed confidence in the ability of banking regulators to respond to the situation.
Yellen pointed out that the US banking system is safe and well capitalized given new controls and capital requirements introduced in the wake of the 2008 financial crisis, and that the system was tested early in the COVID-19 pandemic.
“Americans can have confidence in the safety and soundness of our banking system,” Yellen said, adding that regulators want to take action to ensure the crisis doesn’t spread to other banks.
The Federal Deposit Insurance Corporation on Friday took steps to protect deposits up to $250,000, but deposits above that amount — which accounted for 85% of SVB accounts — are at risk.
More than 3,500 executives and founders, representing some 220,000 workers, have signed a petition to support savers as more than 100,000 jobs could be at risk.
When asked if depositors should receive the full amount, Yellen declined to comment on specifics.
“We are well aware of the problems that investors will face. Many of them are small businesses with employees across the country. Of course, this raises serious concerns,” the finance minister said.
