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Silicon Valley Bank SVB collapsed. The US administration has announced that it will provide customers with access to deposits – US President Joe Biden comments

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Customers with deposits at the bankrupt Silicon Valley Bank (SVB) will have access to all of their funds starting Monday, the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) announced. US President Joe Biden has stated that he is determined that those responsible for the situation that arose after the bankruptcy of the SVB bank “be held to account”. Goldman Sachs analysts expect the Fed will not raise interest rates amid tensions in the banking sector.

It was announced on Friday bankruptcy of the American bank Silicon Valley Bank and it was closed by the Federal Deposit Insurance Agency. The Reuters agency stressed that it was the biggest collapse in the banking sector since 2008, when the American Lehman Brothers collapsed. At the end of 2022, SVB had over $209 billion in assets.

“Depositors will have access to all of their money starting Monday, March 13. No losses associated with the liquidation of Silicon Valley Bank will be incurred by the taxpayer,” Finance Minister Janet Yellen, Federal Reserve Chairman Jerome Powell and FDIC Chairman Martin Gruenberg announced in a joint statement.

Sunday’s announcement is the government’s response to the collapse of the 16th largest bank in USAplaying a significant role in servicing Silicon Valley companies and funds.

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Shareholders won’t get their money back, management fired

As announced, the bank’s shareholders will not recover their deposits, and its management has been dismissed. Losses arising from the liquidation of the bank will be covered by the federal guarantee fund. Although according to the law, only deposits up to 250,000 are guaranteed. dollars, the administration decided to provide customers with access to all their SVB accounts, citing the desire to eliminate risk to the banking system.

“This step will ensure that the U.S. banking system continues to fulfill its critical roles of protecting deposits and providing access to credit for households and businesses in a way that promotes strong and sustainable economic growth,” the statement said.

At the same time, similar steps were taken against the New York Signature Bank, which closed on Sunday. Technology companies dominated among the bank’s clients.

US President Joe Biden comments

President of the USA Joe Biden stated on Sunday that he was determined that those responsible for the situation that arose after the bankruptcy of the SVB bank would be held accountable.

“I am determined that those responsible for this mess will be held to full account, and that we will continue our efforts to strengthen supervision and regulation of larger banks so that we do not find ourselves in this situation again,” Biden said in a statement released.

He added that “Americans and American companies can trust that their bank deposits will be there when they need them.”

Biden said the Treasury secretary and other federal agencies were “working diligently” with banking regulators to resolve the issues raised by the failures of Silicon Valley Bank and Siganture Bank, and that steps were being taken to ensure taxpayers’ money was not at risk.

Trump said on Monday he would unveil measures to maintain “a stable banking system and protect our historic economic recovery.”

The IMF monitors the potential effects of SVB collapses

The International Monetary Fund (IMF) said on Sunday it was monitoring the potential effects of the collapse of the Silicon Valley Bank on financial stability.

“We are closely monitoring developments and the potential implications for financial stability, and we are fully confident that US policy makers are taking appropriate steps to address the situation,” an IMF spokesman said in a statement sent to Reuters.

What about US interest rates?

On March 21-22, a meeting of the Fed, the American equivalent of the National Bank of Poland, will take place.

Goldman Sachs analysts said they do not expect the Fed to raise interest rates at the March meeting, due to tensions in the banking sector. Goldman Sachs had previously expected a 25 basis point hike at its next meeting.

Main photo source: PAP/EPA/SARAH YENESEL

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