March 10th saw the collapse of Silicon Valley Bank on the pretext of its failure in its attempt to sell shares. Since the news of this failure, the money of depositors has been in jeopardy. The Biden administration announced on Sunday that the money of customers of deposit services provided by the bank is safe and can be accessed by them as of Monday, March 13th. They were denied access due to technical issues since the closure of the bank.
After the announcement of the collapse, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve started to work on protective measures for depositors. Treasury Secretary Janet Yellen on Sunday assured that after a detailed consultation with Joe Biden, no deposit would be harmed in the process. However, shareholders and certain unsecured debt holders will not be protected.
In addition, senior management has been dismissed. As mandated by law, any damages to the Deposit Insurance Fund, which is utilized to support depositors without insurance, will be recuperated through a special evaluation imposed on banks, according to the statement.
The Federal Reserve Board has declared that it will provide supplementary financing to qualified depository institutions to guarantee they can meet the requirements of all their depositors, as indicated in the statement. This measure will ensure that the banking system in the United States continues to play a significant role in safeguarding deposits and granting credit access to households and companies while simultaneously stimulating durable and robust economic expansion.
The statement by Yellen is expected to calm customers’ nerves about the failed bank, as they will now be able to access their money without any issues. The move is also expected to improve confidence in the banking system as a whole, as customers now know that their funds are secure and easily accessible.
The government has taken several measures to restore stability in the banking system. These include providing additional funding to eligible depository institutions as well as implementing special assessments on banks to recover any losses to the Deposit Insurance Fund.
The announcement shows that the government is serious about making sure that customers’ money is safe and that they can get to it when they need to.It also shows that the government is willing to act quickly to stabilize the financial system and restore confidence in the banking sector.
Overall, the announcement that the bank’s depositors will have access to their money starting Monday is a positive development for customers who were concerned about their funds’ safety. It also shows that the government is serious about keeping the banking system stable and safe.