The global and US economies remain severely rattled following the landmark collapses of the Silicon Valley and Signature Banks, with bank customers becoming wary of even the longest-running and most steadfast banking institutions. To assuage concerns, US Treasury Secretary Janet Yellen gave a prepared speech to the American Bankers Association offering assurances that the government is doing everything possible to preserve everyone’s deposits.
“The steps we took were not focused on aiding specific banks or classes of banks. Our intervention was necessary to protect the broader US banking system,” Yellen said. “Similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”
Bank regulators have already issued guarantees of all deposits, including and beyond the previously ensured amount of $250,000 for those who banked with Signature and SVB. If concern begins to affect other central banks, the government is prepared to offer these same protections to them as well.
Janet Yellen will pledge to protect depositors at smaller US banks https://t.co/k2soQIz1Oa
— Guardian news (@guardiannews) March 21, 2023
“The situation is stabilizing. And the US banking system remains sound,” Yellen said. “The Fed facility and discount window lending are working as intended to provide liquidity to the banking system. Aggregate deposit outflows from regional banks have stabilized.”
“Treasury is committed to ensuring the ongoing health and competitiveness of our vibrant community and regional banking institutions,” Yellen concluded.
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