(AmericanProsperity.com) – US Treasury Secretary Janet Yellen said during a Sunday interview on CBS News’ “Face the Nation” that the recently-collapsed Silicon Valley Bank (SVB) won’t receive any bailout. She also told host Margaret Brennan that the US government would assist every single regulator in helping protect depositors. However, she pointed out that the Silicon Valley tech lender won’t be able to get any help.
Last Friday, the California Department of Financial Protection and Innovation decided to shut down the SVB after its stock fell by over 60 percent in premarket morning trading because of clients’ withdrawals and fears of another major crisis across the banking industry. The tech lender mostly served high-risk startups that were hit by higher interest rates, and it was among the top 20 commercial banks in the United States with $175 billion in total deposits and $209 billion in total assets by 2022.
When asked whether the US had ruled out any bailout, Yellen told Brenna it was just impossible to do anything because of the numerous reforms that were put in place in the country after investors and owners of large banks were bailed out during the 2008 financial crisis. “We’re not going to do that again,” Yellen said. She also pointed out that, despite this situation, the Treasury Secretary will try to meet depositors’ needs as soon as possible.
With regard to other possible failures and crashes at other major US banks, Yellen explained that even when the Silicon Valley tech lender is currently suffering the worst type of crisis, this doesn’t mean that other banks will go through similar problems. She added that any type of “contagion” or domino effect in the banking industry can easily be prevented with regulation and supervision.
As reported by Axios, the collapse of the SVB represents the largest bank implosion since the one of Washington Mutual during the 2008 financial crisis.
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