Connect with us

Hi, what are you looking for?


Regulators Are Now In Plans After Silicon Valley Bank Collapse

Over the weekend, the Silicon Valley Bank, one of the most prominent financial institutions in the global tech sectors, suffered a sudden, brutal collapse. The collapse was the result of a weekend bank run, where scores of investors attempted to pull their funds out of the bank simultaneously, driving its values into the ground and forcing a shutdown. With the bank inactive, tech and startup companies have expressed concerns about making payroll, but the Federal Reserve is making plans to ensure a relatively smooth transition.

In a joint statement over the weekend, Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell, and Federal Deposit Insurance Corporation Chairman Martin J. Gruenberg pledged to make all SVB deposits available to their owners today, including both owned funds and insured funds.

“The US banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the [2008] financial crisis that ensured better safeguards for the banking industry,” the regulators said. “Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.”

“Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out … and the reforms that have been put in place means that we’re not going to do that again,” Yellen said in a separate interview with CBS. “But we are concerned about depositors and are focused on trying to meet their needs.”

While this will likely be a difficult and strenuous process, analysts are generally of the opinion that this is the right move to make, given the circumstances.

“Monday will surely be a stressful day for many in the regional banking sector, but today’s action dramatically reduces the risk of further contagion,” Jefferies analysts Thomas Simons and Aneta Markowska said in a note to investors obtained by CNN.

Image Source: Sundry Photography / Shutterstock

You May Also Like


Back in April, Tesla and SpaceX CEO Elon Musk made major waves when he announced his intent to purchase the social media platform Twitter...


As fears of inflation are affecting the entire United States economy, one sector that’s taking on the brunt of the damage is the housing...


As fuel and energy costs increase around the world and especially in the United States, the pursuit for renewable energy resources has become even...


Kellogg, one of the largest providers of packaged foods in the United States and the world, has maintained a generally consolidated control of all...