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US Treasury Janet Yellen Is Working On SVB Collapse, Not On The Bailout: Report

US Treasury Janet Yellen Is Working On SVB Collapse, Not On The Bailout: Report

US Treasury Secretary Janet Yellen is reported to be working with regulators to address the collapse of the Silicon Valley bank and protect investors, but is not considering a major bailout.

Yellen made the comments interview with CBS News on March 12, claiming that regulators are designing “appropriate policies to remedy the situation” at the bank. She said:

“During the financial crisis, there were investors and large, systemic bankers who were bailed out, and we’re certainly not looking. And the reforms that have been put in place mean we won’t do that again. But we’re concerned about depositors and we’re focused on trying to meet their needs.”

Regarding the fact that most accounts in SVB are insecure, Yellen notes that regulators are “very well aware of the problems depositors will encounter, many of which are small businesses employing people all over the country. Of course, that’s a huge concern, and working with regulators to try to address these fears.”

Yellen also spoke about the potential for other regional US banks to be affected by the collapse of Silicon Valley:

“Let me just say that we want to make sure that problems in one bank don’t infect others intact. The goal is always oversight and regulation is to make sure that infection can’t happen.”

Data from the Federal Reserve shows that small banks in the United States had $6.8 trillion in assets and $680 billion in equity as of February 2023. A tech bank failure would “risk thousands of small banks running out,” it said. By Cointelegraph.

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Related: Silicon Valley Bank Failure Could Lead to a Crash for US Regional Banks

Silicon Valley Bank is one of the 20 largest banks in the United States, providing banking services to many cryptocurrency-friendly venture companies. According to the Castle Hill report, total assets from Web3 venture capitalists are more than $6 billion in the bank, including $2.85 billion from Andreessen Horowitz, $1.72 billion from Paradigm, and $560 million from Pantera Capital.

According to Lillen, the Federal Deposit Insurance Corporation (FDIC) is looking at “a wide range of options available,” including acquisitions from foreign banks. “We are certainly working to address the situation at the appropriate time,” she noted.

California’s financial watchdog shut down Silicon Valley on March 10 after announcing a major sale of assets and stocks with the goal of raising $2.25 billion in capital to support operations. The FDIC is designated as the recipient of Insured Deposit Protection. However, the FDIC only insures up to $250,000 per depositor, per institution, and per ownership class.