Janet Yellen, the Treasury Secretary, said on Sunday that there would not be a bailout for the collapsed Silicon Valley Bank.
She appeared on CBS News’s “Face The Nation” with host Margaret Brennan, saying the government would help regulators to protect depositors. She also made it clear that there would not be a federal bailout for the back.
“Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out,” Yellen told Brennan when she was asked point blank if the United States had pulled 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,” she said.
Brennan made the point that almost 85% of the accounts were uninsured and she questioned Yellen about whether she thought depositors should be paid back in full.
Yellen didn’t respond directly to that question but said she would not disclose specific details. She said 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.”
Silicon Vally Bank revealed that a $1.75 billion share occurred on Wednesday after the bank suffered heavy losses from liquidating a $21 billion bond portfolio.
That move raised concerns among venture capital firms and startups about the safety of their assets.
The Federal Deposit Insurance Corporation (FDIC) revealed over the weekend that SVB was closed by the California Department of Financial Protection and Innovation.
This closing marks the largest bank failure since Washington Mutual collapsed in late 2008.
Yellen tried to ease the public by saying, “What I do want to do is emphasize that the American banking system is really safe and well-capitalized, it’s resilient.”
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