This past Sunday, Treasury Secretary Janet Yellen expressed in a statement that there would be absolutely no bailouts coming for the collapsed Silicon Valley Bank.
While making an appearance on an episode of CBS News’s “Face The Nation” alongside host Margaret Brennan, Yellen stated that the government would assist regulators in assisting to protect depositors but made entirely clear that there would be no federal bailout for the major tech bank.
“Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out,” Yellen stated to Brennan when questioned about whether the U.S. had officially ruled out a bailout. “And the reforms that have been put in place means that we’re not going to do that again. But we are concerned about depositors and are focused on trying to meet their needs.”
Asked whether the government might bail out banks as it did during the 2008 crisis, @SecYellen says, “We’re not going to do that again.” But she adds, “We are concerned about depositors and are focused on trying to meet their needs.” pic.twitter.com/sg5WBFWfPj
— Face The Nation (@FaceTheNation) March 12, 2023
Brennan did highlight that close to 85% of the accounts were wholly uninsured and questioned Yellen if she thought those who had deposited should be paid back in full.
Yellon stated that she would not at that time be giving out any specific details on the issue but did state that the government was “very “aware of the problems that depositors will have, many of them are small businesses that employ people across the country. And of course, this is a significant concern, and working with regulators to try to address these concerns.
Recently, Silicon Valley Bank announced a massive $1.75 billion sale of shares in the wake of the financial institution suffering heavy losses from liquidating a massive $21 billion bond portfolio, raiding extreme concerns throughout venture capital firms and startups that have ties to the company about the overall safety of their assets. As the 16th-largest bank in the United States and the biggest of its kind in Silicon Valley, SVB was known to lend to close to half of all publically traded venture-backed technology and healthcare companies.
The Federal Deposit Insurance Corporation (FDIC) expressed this past Friday that SVB was closed down by the California Department of Financial Protection and Innovation. All insured depositors will have complete access to their funds as soon as Monday morning, as reported in a press release coming from the government-backed firm, while all uninsured depositors can expect an advance dividend over the coming week.
“At the time of closing, the amount of deposits in excess of the insurance limits was undetermined,” the FDIC stated. “The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.
Charles Gasparino, a senior correspondent for the Fox Business Network, issued a report that stated that depositors would get about 30-50% of their money on Monday and “most of the rest” over a period of time, citing a number of sources familiar with the issue.