Both the global and US economies are currently in turmoil following the significant collapses of Silicon Valley and Signature Banks. This has led to a sense of unease among bank clients, even towards the most established banking entities. To alleviate these concerns, Janet Yellen, the US Treasury Secretary, addressed the American Bankers Association, delivering a speech to reassure everyone that the government is taking every necessary measure to protect their deposits.
Yellen stated, “Our actions were not targeted at assisting individual banks or specific bank categories. Our intervention was crucial to safeguard the broader US banking system. Should smaller banks face deposit withdrawals that could lead to contagion risks, similar interventions might be deemed necessary.”
Regulators have already provided guarantees for all deposits, surpassing the previous insured amount of $250,000, for customers of both Signature and SVB. In case concerns begin to impact other major banks, the government is prepared to extend these same protections to them.
Janet Yellen vows to safeguard depositors at minor US banks https://t.co/k2soQIz1Oa
— Guardian news (@guardiannews) March 21, 2023
Yellen emphasized, “The situation is gradually improving, and the US banking system remains sturdy. The Federal Reserve’s facility and discount window lending are effectively providing liquidity to the banking sector. Outflows of deposits from regional banks have stabilized.”
“The Treasury is dedicated to ensuring the continual well-being and competitiveness of our dynamic community and regional banks,” Yellen concluded.
Source of Image: Alexandros Michailidis / Shutterstock
