Federal Reserve Announces Backstopping of Silicon Valley Bank and Signature Bank Depositors
Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and Federal Deposit Insurance Corporation (FDIC) Chairman Martin J. Gruenberg issued a joint statement this evening approving actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. The statement provides that customers will have access to all of their money starting Monday, March 13, and that no losses associated with this resolution will be borne by the taxpayer.
By guaranteeing access to all deposits, this means that depositors will have access to $250,000 federally insured amounts in addition to any uninsured money customers kept with the failed bank. The announcement also stated that Signature Bank out of New York, New York, was closed today by its state chartering authority, but that all depositors of Signature Bank will also be made whole. While depositors have been protected by these actions, shareholders and holders of unsecured corporate bonds will not be protected by the regulators’ plan. Futures markets and crypto markets traded up sharply on the news, and the USDC stablecoin regained its dollar peg. A link to the announcement is here.
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