Yellen Works with Regulators to Address Silicon Valley Bank Collapse
On March 10, 2023, California's financial watchdog shut down Silicon Valley Bank (SVB) following an announcement of a significant sale of assets and stocks to raise $2.25 billion in capital to shore up operations. As a result, the Federal Deposit Insurance Corporation (FDIC) was appointed as the receiver to protect insured deposits. While the FDIC only insures up to $250,000 per depositor, per institution, and per ownership category, concerns are mounting about the impact of the collapse of SVB, particularly on small businesses that employ people across the country.
In response to the situation, United States Treasury Secretary Janet Yellen is working with regulators to address the collapse of SVB. In a recent interview with CBS News, Yellen stated that they are designing «appropriate policies to address the situation» at the bank. She also noted that they are not considering a major bailout, citing the reforms that have been put in place since the financial crisis. However, Yellen emphasized that they are focused on protecting depositors and are working with regulators to address their concerns.
One of the challenges facing depositors is the fact that most accounts at SVB are unsecured. Yellen acknowledged this issue and stated that regulators are «very aware of the problems that depositors will have.» She also expressed concern about the possibility of contagion to other regional American banks, stating that «the goal always is supervision and regulation is to make sure that contagion can't- can't occur.»
SVB is one of the top 20 largest banks in the United States and provides banking services to many crypto-friendly venture firms. According to a Castle Hill report, assets from Web3 venture capitalists totaled
Read more on blockchain.news
