US financial regulators rolled out emergency measures Sunday night to stem potential contagion from the collapse of Silicon Valley Bank. The measures include ensuring that depositors with the failed bank would have access to all their money on Monday morning.
Regulators announced the measure in a joint statement from the treasury secretary, Janet Yellen, the Federal Reserve chair, Jerome Powell, and the Federal Deposit Insurance Corporation (FDIC) chair, Martin Gruenberg.
“Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,” they said in a statement.
The announcement came as Signature Bank was closed on Sunday by regulators, the second to fail in a week. Depositors in Signature would also be made whole, the statement said.
Guaranteeing all deposits, well, they’ve not been paying the insurance fees so why should they gain the insurance?
But on the other hand, runs are runs and you do have to head them off at the pass.
“The American people and American businesses can have confidence that their bank deposits will be there when they need them,” Joe Biden said in a statement
That’s them screwed, then.
@Steve
My first thought when I read it
Streetwise Professor has a good article on this. One of the interesting pionts re deposit isnurance is that the company Roku had $500m cash deposits with the bank. Oh and moral hazard anybody?
“ But on the other hand, runs are runs and you do have to head them off at the pass.”
And the next time, and the time after that, and the time after that…
Maybe let them fall over the cliff and be done with the taxpayer funded repetition every few years?
I thought that we were told after the last GFC that in future bank depositors would have to take haircuts rather than be bailed out by the taxpayer? That policy seems to not have aged well…….
Lurker – He does have the Kinnock touch.
Jim – Like they told us the last time, it won’t happen again.
Maybe that bank was choca with Democrat depositors. That’s a plain different thing.
“Maybe that bank was choca with Democrat depositors. That’s a plain different thing.”
Well given it was primarily a bank for IT businesses its probably pretty nailed on they were at least all big Democrat donors. Can’t have let your paymasters go to the wall now can you?