The US government wants to prevent the bankruptcy of the US bank Silicon Valley Bank (SVB) from causing contagion to the rest of the banking system, US Treasury Secretary Janet Yellen said on Sunday, who nevertheless ruled out a bailout for the bank. establishment.
“We want to make sure that the problems that affect one bank do not create contagion to others that are solid,” said the US finance minister during an interview with CBS. The Deposit Insurance Agency (FDIC), a branch of the US government, took control of Silicon Valley Bank on Friday, on the brink of implosion under the effect of massive withdrawals from its clients. If until now the big banks have been saved, several medium-sized or regional establishments unscrewed this Friday on the Stock Market, fleeing from concerned investors.
This is particularly the case for the First Republic of California, which fell almost 30% in two sessions, Thursday and Friday, or Signature Bank, cut by a third of its value since Wednesday night. Both institutions have a large proportion of companies in their client base, whose deposits often exceed the maximum FDIC-insured amount, or $250,000 per depositor, which could lead them to withdraw their funds.
The US government is working on “a resolution”
Janet Yellen explained this Sunday that the government was working this weekend, with the FDIC, on “a resolution” of the situation of SVB, of which approximately 96% of the deposits are not covered by the refund guarantee of the FDIC. “I’m sure (the FDIC) is considering a wide range of solutions, including an acquisition” by another bank, the Treasury secretary said. On the other hand, he ruled out a rescue of SVB through an injection of public money.
“During the financial crisis (of 2008), investors in large systemic banks,” whose failure the authorities believe would represent a risk to the entire financial system, “were bailed out” by the US government, he reiterated. “We’re not going to do it again.”
Source: BFM TV
