Silicon Valley Bank collapse: US regulators announce plan to bail out customers

FSunday’s statement by the Federal Bank Regulators was that they believed that the Federal Deposit Insurance Corporation Will use emergency measures for back Silicon Valley Bank Deposits paid in full

The much-anticipated joint statement of the Federal Reserve and Treasury Department as well as the FDIC announcing the U.S. decision of guaranteeing deposits beyond the federally insure ceiling of $250,000 was released two days after SVB. sudden collapseThis has raised fears about a possible banking crises. SVB’s senior management would also be dismissed according to the Treasury.

SILICON VALLEY BANCK COLLAPSE – CEO CASHED OUT MILLIONS, WHILE EMPLOYEES GET BONUSES

“After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the president, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, Calif., in a manner that fully protects all depositors,” This is the statement. “Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”

These agencies plan to also enact a similar plan in Signature Bank. Signature Bank was closed by New York’s state-chartering authority on Sunday.

SVB was financially successful during the COVID-19 pandemic. This is because the SVB had major cash deposits from booming companies that grew its deposits from $60 billion to more than $200 billion by December 2022. Wall Street Journal reported. Its securities portfolio grew from $27 billion in the 2020 first quarter to $127 billion by 2021’s end.

The fact that most of SVB’s assets were seemingly secure — they were mainly longer-term government bonds — led many investors to feel the bank was secure. SVB’s government securities are fixed-rate, meaning that they pay no market interest.