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A few days after the bankrupt Californian Silicon Valley Bank (SVB) and another bank, Signature Bank, were shut down, US authorities announced that they were taking far-reaching steps to protect deposits at credit institutions.
The Federal Reserve, the Department of the Treasury and the Federal Deposit Insurance Fund FDIC announced on Sunday that SVB depositors will have access to “all their money” from Monday. The taxpayer will not have to pay for it.
In a joint statement made by the authorities, it was stated that access to all deposits in New York-based Signature Bank will also be possible. The bank also ran into trouble and was shut down by US authorities on Sunday. But, according to the Fed’s statement, “shareholders and certain unsecured borrowers are not protected. Management has also been removed,” the Fed told the New York bank.
In addition, the US Federal Reserve has announced that it will provide additional funds to banks to meet the needs of depositors – this should affect withdrawals as well. “We are taking decisive action to protect the US economy by increasing public confidence in our banking system,” the officials said. The US banking system remains resilient and on solid foundations.
The FDIC only protects deposits up to $250,000 (approximately CHF 230,000) per customer and bank. However, according to a report by The Washington Post, the Federal Banking Act will allow the deposit insurance fund to protect unsecured deposits if systemic risks are otherwise threatened.
US President Joe Biden (80) promised on Sunday that those responsible for bankruptcies will be held accountable. “The American people and American companies can count on their bank deposits to be there when they need it,” the Democrat said. The head of state announced on Monday that he would like to comment on the banking system.
US authorities closed the SVB on Friday. The financial institution faced great difficulties as a result of the billions in losses from the sale of securities. SVB is a little-known bank to the general public, but has played an important role in financing start-ups in the US since the 1980s. (cut/SDA)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
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