The United States is ready to insure uninsured deposits to contain a banking crisis

The situation on the banking market in NOW it is still sensitive. bankruptcy of Silvergate, signature and Silicon Valley Bank (SVB) exposed deficiencies in the regulation and supervision of financial institutions. At least 200 small and medium-sized banks are in the same situation as the latter: they used cheap money from the Federal Reserve to invest in long-term, low-yield government bonds. With the increase Interest rates and requests to withdraw money from its depositors, it faced a serious liquidity problem.

The one who suffers the most First Republic Bank, which the big banks already saved a few days ago by injecting 30,000 million dollars. The entity sank again on the stock market yesterday, 50%, forcing its rescuers to consider another bailout.

To avoid a false effect, secretary of the treasury, Janet Yellenannounced in the last few hours before the American Banking Association that the authorities will do whatever is necessary to prevent the disappearance of money in the entities, showing their “absolute commitment to take all necessary measures to ensure the safety of depositors’ savings and the banking system”, according to Reuters. And that announcement, along with the possibility of another bailout, has given air back to a subject whose headlines are recovering more than 20% before the market open.

Yellen leaves the door open for further measures like those taken after the SVB bankruptcy, when deposits were guaranteed, whether they were guaranteed or not.

Janet Yellen: “Our intervention was necessary to protect the entire American banking system”

The decision to save all of them was criticized by some experts who believed that other banks were encouraged to take risks and make bad management decisions because the authorities would ultimately resort to saving deposits.

As Yellen herself explained, the decision was forced by circumstances: “The measures we took were not aimed at helping certain banks or types of banks. Our intervention was necessary to protect the entire American banking system,” he assured before indicating that “Similar actions could be justified if smaller institutions suffer deposit flight that poses a contagion risk”.

In recent days, the country’s banking associations have asked the authorities to guarantee all bank deposits in the United States, where there is a maximum legal threshold: the first 250,000 dollars (232,000 euros), compared to 100,000 euros in the eurozone.