The global and US economies are still in turmoil after the Silicon Valley and Signature Banks collapsed, leading to a loss of trust among bank customers in even the most well-established banks. To reassure the public, US Treasury Secretary Janet Yellen delivered a speech to the American Bankers Association, emphasizing that the government is taking all necessary steps to safeguard everyone’s deposits.
Yellen stated, “The measures we implemented were aimed at safeguarding the entire US banking system, not just specific banks or segments of banks. Our intervention was crucial to safeguard the broader banking sector. Similar actions may be required if smaller banks face deposit withdrawals that could escalate into a systemic risk.”
Regulators have extended guarantees to cover all deposits, going beyond the previous limit of $250,000 for customers of Signature and SVB. If anxiety spreads to other banks, the government is prepared to extend these protections to them as well.
Yellen expressed confidence saying, “The situation is showing signs of stability, and the US banking system remains solid. The Fed’s tools and lending through the discount window are effectively providing liquidity to banks. Outflows of deposits from regional banks have normalized.”
Yellen concluded, “The Treasury is dedicated to ensuring the resilience and competitiveness of our dynamic community and regional banks.”
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