US Treasury’s Yellen Says Banking Is ‘Good’
US Treasury Secretary Janet Yellen is expected to tell bankers on Tuesday that the financial system is “solid” after the recent turmoil.
The failures of Silicon Valley Bank and Signature Bank earlier this month led to fears that the US banking system faces an imminent widespread crisis.
Yellen will defend federal response
Speaking at a summit held by the American Bankers Association in Washington, DC, Yellen said her department has taken firm action to protect the US banking system, according to excerpts of her prepared remarks released by the Treasury.
Yellen will publicize the government’s efforts to protect uninsured customer deposits at the two failed banks, along with the Federal Reserve’s new lending tools.
“The actions we took were not focused on helping specific banks or classes of banks. Our intervention was necessary to protect the US banking system as a whole,” the statement said. “And similar actions may be warranted if smaller institutions experience deposit runs that pose the risk of contagion.”
“I believe our actions have reduced the risk of further bank failures,” Yellen will say.
End of SVB triggered by bank run
The Silicon Valley Bank (SVB) collapse in California on March 10 was the second largest in US history. A run on deposits and worries about the bank’s financial prospects led to the demise of SVB.
Days after the SVB collapsed, New York authorities shut down Signature Bank, which was being investigated by the US Department of Justice for insufficient anti-money laundering efforts.
San Francisco-based First Republic Bank has also faced danger in recent days. A group of 11 largest banks, including Wells Fargo and Bank of America, deposited $30 billion ($27.8 billion) in First Republic Bank to shore up its financial position.
Europe also faces female bankers
Europe is also facing banking turmoil, with Switzerland’s biggest bank UBS bailing out rival Credit Suisse in a takeover deal on Sunday. UBS will buy Credit Suisse for CHF3 billion ($3.2 billion, €3.2 billion).
Source: DW
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.