On Sunday, the New York government took control of a bank called Signature Bank. This was done with the help of the Federal Deposit Insurance Corporation (FDIC).
The U.S. Federal Reserve, Treasury Department, and FDIC promised that everyone who had their money in this bank should get their money back – which is similar to when the USA bailed out a Californian bank called Silicon Valley Bank (SVB).
Government Protects Bank Depositors with U
Signature Bank, a bank that helps with cryptocurrency, was closed by financial regulators. The FDIC took control of the New York bank. In a news release on Sunday evening, Adrienne Harris of the New York Department of Financial Services said that Signature had about $110.36 billion in assets and about $88.59 billion in total deposits on December 31, 2022.
Silvergate Bank and Silicon Valley Bank have both crashed, making SVB the second-largest bank failure in America since 2008 when Washington Mutual went bankrupt. Everyone was waiting all weekend to hear about it, but now the US Federal Reserve, Treasury Department, and FDIC have released a statement so that everybody knows what’s going on.
The U.S. government announced an update at 6:15 p.m. ET that they’re taking steps to protect our economy and keep us from worrying about banks like SVB and Signature Bank. The plan ensures that all depositors will have access to their money come March 13th, without making tax-payers foot the bill for it. Secretary of Treasury Janet Yellen helped make this happen, along with the FDIC and Federal Reserve.
The Federal Reserve announced the start of a program called Bank Term Funding Program (BTFP), which is made to help people who banked with failing banks and keep their deposits secure. The U.S. Treasury Department agreed to lend up to $25 billion as an extra backup for this program in case that’s needed, but the Federal Reserve believes it won’t be necessary in the end.
The U.S. central bank said that they are observing the current financial markets closely and ensuring the quality of our banks energy levels and ability to remain strong. In other words, the American banking system is safe and will get through any tough times it faces.
What effect do you think the government’s decisions to protect people who have money in Silicon Valley Bank and Signature Bank will have on other banks and how much people trust them? Please let us know your ideas about this topic by leaving a comment below.