The Washington Post reports:
The Biden administration announced Sunday night that all depositors at the failed Silicon Valley Bank would have access to all their money on Monday morning, approving an extraordinary intervention aimed at averting a crisis in the financial system. Authorities said they were also extending protection to depositors of a second bank, Signature Bank of New York, which state regulators closed on Sunday as unease in the financial sector spread.
The decision by Treasury to backstop all deposits at SVB and Signature — not just those up to $250,000 that are insured under federal law — rested on a judgment that it was necessary to avoid a wider “systemic” meltdown. The move will likely ignite a political firestorm over the decision to protect the assets of tech firms, venture capitalists, and other rich people in California.
Along with that move, the Federal Reserve also said it is creating a new Bank Term Funding Program aimed at safeguarding institutions affected by the market instability of the SVB failure.
A joint statement from the various regulators involved said there would be no bailouts and no taxpayer costs associated with any of the new plans. Shareholders and some unsecured creditors will not be protected and will lose all of their investments.
“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” said a joint statement from Federal Reserve Chair Jerome Powell, Treasury Secretary Janet Yellen and FDIC Chair Martin Gruenberg.
The usual suspects are already screaming.
The Treasury’s sure fire economic method of saving banks who are divested in ESG and DEI.
And just like that the FDIC limit of $250,000 doesn’t matter anymore. pic.twitter.com/Gvi48TLX4I
— Rep. Marjorie Taylor Greene🇺🇸 (@RepMTG) March 13, 2023
Whoa! Here it is. The moment in 2018 when Donald Trump removed the Dodd-Frank regulations that would have prevented the Silicon Valley Bank collapse. Don’t let anyone forget this. pic.twitter.com/3ccLFMWH2o
— MeidasTouch (@MeidasTouch) March 12, 2023
At my direction, @SecYellen and my National Economic Council Director worked with banking regulators to address problems at Silicon Valley Bank and Signature Bank.
I’m pleased they reached a solution that protects workers, small businesses, taxpayers, and our financial system. https://t.co/CxcdvLVP6l
— President Biden (@POTUS) March 13, 2023
My statement on Silicon Valley Bank. pic.twitter.com/dwB8xdhCwm
— Bernie Sanders (@SenSanders) March 12, 2023