Federal bailout for Silicon Valley Bank off the table, Yellen says

8 months ago 5

A sign for Silicon Valley Bank is seen through raindrops on a window in Santa Clara, Calif., Friday, March 10, 2023. | Jeff Chiu/AP Photo

The collapse of Silicon Valley Bank, “is clearly a concern,” Treasury Secretary Janet Yellen said Sunday, but a federal bailout is not on the table.

“During the financial crisis, there were investors and owners of systemic large banks that were bailed out, and we’re certainly not looking [at that]. And the reforms that have been put in place means that we’re not going to do that again,” Yellen told host Margaret Brennan during an interview on CBS’ “Face the Nation.”

SVB’s collapse Friday, the biggest bank failure since the 2008 financial crisis, sent shockwaves through markets across the world. The bank had $209 billion in assets, and many of its depositors were Silicon Valley-backed startups and health-care businesses, some of whom have payrolls to meet this week.

But although the collapse is concerning, Yellen emphasized that the American banking system is “safe and well-capitalized” and “resilient.”

Americans “can have confidence in the safety and soundness of our banking system,” Yellen said Sunday.

“We want to make sure that the troubles that exist at one bank don’t create contagion to others that are sound,” Yellen added.

The best outcome would be for the Federal Deposit Insurance Corp. to find a buyer for the bank, Sen. Mark Warner (D-Va.), said Sunday.

“I’ve been in conversations with the regulators, the administration, the [Federal Reserve], the best outcome will be, can we — can they find a buyer for this SVB bank today before the markets open in Asia later in the day?” Warner, a member of the Banking Committee said during an interview on ABC’s “This Week.”

House Speaker Kevin McCarthy also addressed the bank’s failure Sunday, saying the federal government was working to come up with a solution before the markets open in Asia Sunday evening.

“I have talked with the administration from [Fed Chair] Jay Powell and Janet Yellen. They do have the tools to handle the current situation. They do know the seriousness of this, and they are working to try to come forward with some announcement before the markets open, McCarthy told Fox News’ Maria Bartiromo during an interview on “Sunday Morning Futures.”

“I’m hopeful that something can be announced today.”

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