Yellen Defends Banking System After SVB and Signature Bank Collapses

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(AmericanProsperity.com) – US Treasury Secretary Janey Yellen said during a Thursday hearing at the Senate Finance Committee that the US financial system remained strong, despite the collapses of the Silicon Valley Bank (SVB) and the Signature Bank. Talking to members of the committee, Yellen said she can guarantee that the American banking system is still “sound” and that she can ensure that every US citizen will have their deposits in their banks whenever they need them, following the Biden administration’s actions on this matter.

The US Federal Deposit Insurance Corporation (FDIC) is currently managing the $212 billion in assets maintained by the SVB, which was closed by California regulators last Friday after massive withdrawals caused by a fear of a banking system collapse. Two days later, New York regulators took the same action against the Signature Bank, with the FDIC currently managing $110 billion in assets maintained by it.

Yellen, who was scheduled to testify on the budget proposal that President Joe Biden submitted last week, began informing lawmakers that the FDIC, along with the Federal Reserve and the Treasury Department, successfully protected the deposits of the Signature Bank and the SVB. She then explained that, as of Monday morning, customers of both banks could have full access to their money in their deposit accounts.

Following her remarks, Senate Finance Committee Ranking Member Mike Crapo (R-ID), along with Senate Finance Committee Chair Ron Wyden (D-OR), explained that despite Yellen’s words, there are plenty of nerves because of the financial chaos that the United States is currently experiencing after the two bank collapses. They also told the economist that the most important step Congress can take is making sure there are no doubts about “the full faith and credit of the United States.”

Alongside FDIC Chairman Martin Gruenberg and Federal Reserve Chair Jerome Powell, Yellen said in a Sunday statement that the US banking system remained strong and promised not a single loss would be borne by taxpayers.