Washington – US Treasury Secretary Janet Yellenassured this Thursday that the country’s banking system is “stable” and that US citizens can trust that their deposits “will be there when they need them.”
In his performance before the legislators in the Senatewho was originally supposed to answer questions about the project of the new government budget, Yellen had to refer to the debacle of the Silicon Valley Bank (SVB), whose collapse triggered an avalanche of doubts about the sector.
The head of the portfolio of the Ministry of Finance reminded that during the last week the administration of the Democrats Joe Biden took “decisive action” for the stabilization of the banking system.
“First, we work with the Federal Reserve (Fed) and the Federal Deposit Insurance Corporation (FDIC) to protect depositsYellen clarified, recalling that on the same Monday SVB clients were already able to access all the money they had in their accounts.
This was done, the official explained, without using taxpayers’ money.since the funds used to protect deposits come from fees paid by the banks themselves.
In addition, the Federal Reserve launched a new fund so that banks that need to insure their customers’ deposits have money to do so.
The decline of SVB caused fear of a new financial crisisAlthough many experts emphasize the exceptional situation of a company that specializes in providing services to start-ups and venture capital companies that finance them.
With everything, panic spread and killed another bank specializing in technology – New York-based Signature Bank –and forced Credit Suisse to borrow about $54 billion from the Swiss central bank after a historic drop in its shares.
many analysts they hope the situation will force the Fed to stop raising rateswith which they try to stop inflation.
Another aspect highlighted by the crisis is the role of regulators, i several lawmakers asked Yellen about the reasons why the bodies in charge of monitoring the health of banks did not understand the fragile situation of SVB.
Source: Panama America
I am Jason Root, author with 24 Instant News. I specialize in the Economy section, and have been writing for this sector for the past three years. My work focuses on the latest economic developments around the world and how these developments impact businesses and people’s lives. I also write about current trends in economics, business strategies and investments.
