After the demise of Silicon Valley Bank, US officials on Sunday outlined extensive measures to allay concerns about the stability of the banking industry as regulators seized control of a second struggling lender.
Since the sudden collapse of the bank shook the markets, regulators intervened to ensure that depositors at SVB still had access to their money and promised other institutions assistance in addressing customers' needs.
In a rescue transaction supervised by the Bank of England and the government, the world's largest bank, HSBC, paid barely £1 ($1.2) for the UK subsidiary of SVB.
President Joseph Biden promised to hold "totally accountable" those guilty for "this mess" amid worries about the entire industry and said that he would speak on Monday morning about preserving a robust banking system.
The American people and businesses can trust that their bank deposits will be available when they are needed, according to Biden.
Financial institutions, including the US Treasury, stated in a joint statement that SVB depositors will have access to "all of their money" as of Monday and that American taxpayers would not be responsible for the cost.
The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Treasury further stated that Signature Bank depositors would also be "made whole." Signature Bank was a regional-sized lender with a significant cryptocurrency exposure based in New York that was shut down on Sunday after its stock price crashed.
Also, the Fed declared it will provide banks with additional funding to assist them in meeting the needs of depositors, including withdrawals.
The statement read, "We are taking bold efforts to defend the US economy by enhancing public confidence in our financial system.
They continued, "The US banking system remains resilient and on a solid foundation," in large part because of the safeguards put in place for the banking sector following the 2008 financial crisis.
"Those changes, along with the ones we've made today, show our dedication to making the required preparations to protect depositors' savings."
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