[March 13, 2023](Comprehensive report by Epoch Times reporter Zhang Ting)Silicon Valley Bank(SVB)’s sudden collapse on Friday (March 10) not only caused widespread concern among depositors, but also shook the technology and banking circles. Bloomberg reported citing sources familiar with the matter.FDIC(FDIC) andthe fedA fund is being considered to appease savers and stem panic.
The new fund will allow regulators to back more deposits at struggling banks.
New fund seen as part of contingency planning
The new special tool was discussed by regulators in conversations with banking executives, people familiar with the matter told Bloomberg. The U.S. wants to create such a tool to reassure savers and help stem any panic, the people said.
Because the talks are private, the people asked to remain anonymous.
The tool is seen as part of a contingency plan as more Americans worry about the health of small banks that primarily serve venture capital and startups.
For the above message,the fedA representative for the company declined to comment to Bloomberg.FDICRepresentatives did not immediately respond to a request for comment.
Separately, the FDIC on Saturday questioned officials at several small and midsize banks, including First Republic Bank, about their financial health, according to people familiar with the matter.
Silicon Valley BankCollapse sparks fears, hits bank shares
The collapse of Silicon Valley Bank is the largest bank failure since the 2008 economic crisis. The collapse raised concerns about a broader decline across the banking sector.
Shares of First Republic fell 15% on the day Silicon Valley Bank suddenly collapsed, as investors tried to sort out which banks might be at similar risk. That extended First Republic’s cumulative losses over the past week to 34%.
The company issued a statement trying to reassure investors. The company said its liquidity remains strong and its deposit base is well diversified.
Shares of other regional banks also plummeted on the collapse of Silicon Valley Bank, prompting them to step up and reassure depositors of financial stability.
Phoenix-based Western Alliance Bancorp is reassuring that its deposits are strong and its liquidity is strong after its stock price fell to its lowest point since November 2020 on Friday (March 10).
On the same day, when PacWest Bancorp shares fell 38 per cent, chief executive Paul Taylor said the company was a “well-performing, well-diversified” merchant bank.
The SVB shutdown will have far-reaching ramifications for the tech world and spur additional focus on the U.S. banking system. SVB was the 16th largest U.S. bank with about $209 billion in assets as of Dec. 31, according to Federal Reserve data.
In an interview aired Sunday on CBS’ “Face the Nation,” U.S. Treasury Secretary Janet Yellen said bank failures would certainly worry depositors.
“The U.S. economy depends on a safe and sound banking system that can provide the credit needs of our households and businesses. So whenever a bank, especially one like Silicon Valley Bank with billions of dollars in deposits fails, obviously is a concern. From a saver perspective, many of these are likely to be small businesses that rely on being able to access these funds so they can pay their bills, and they employ tens of thousands of people across the country,” she said. .
Asked whether the government would intervene to take emergency steps, Yellen said, “We’ve been hearing from these savers and other concerned people this weekend. I’ve been working with our bank regulators all weekend to develop Appropriate policies to address this situation.”
Responsible editor: Li Qiong#