Janet Yellen, the US Treasury Secretary, has ruled out a governmental rescue for the now-defunct Silicon Valley Bank.
“During the financial crisis, there were investors and owners of systemic large banks that were bailed out,” Yellen said on CBS News in an interview with “Face the Nation” on Sunday, referring to the 2007-2009 financial crisis that led to a massive government rescue aimed at heading off a wider catastrophe. “And the reforms that have been put in place mean that we’re not going to do that again. But we are concerned about depositors and are focused on trying to meet their needs,” she added.
Yellen said she’s been hearing from depositors all weekend, many of whom are “small businesses” and employ thousands of people. “I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation,” the Treasury secretary said, declining to provide further details.
The fall of the bank has also generated fears of a rerun of the 2008 financial crisis, although Yellen attempted to reassure Americans that the failure was an unique occurrence, according to CBS News.
“What I do want to do is emphasize that the American banking system is really safe and well-capitalized, it’s resilient,” said Yellen.
Silicon Valley Bank was closed down by California authorities on Friday after depositors hurried to withdraw funds last week due to worries about its balance sheet. The Federal Deposit Insurance Corporation (FDIC) has been named receiver, and authorities are seeking to find a buyer for the bank, which was the 16th-largest in the United States prior to its demise.
The fall of the 40-year-old bank, which catered to the computer industry, is the greatest financial institution failure since the 2008 collapse of Washington Mutual.
The drop, the second greatest in American history, roiled Wall Street before of the stock market’s opening on Monday morning.
