US Treasury Secretary Janet Yellen said on Sunday that the government wanted to avoid financial “contagion” after the failure Silicon Valley Bankbut he ruled out saving the entity.
“We want to make sure that problems in one bank don’t cause a strong infection for others,” Yellen said during an interview with CBS.
US authorities closed the bank on Friday to protect the deposits of its customers.
The banking sector as a whole fell on Wall Street on Thursday, but shares of some of the largest banks rebounded on Friday.
However, regional lenders remained under pressure, including First Republic Bank, which fell nearly 30% in two sessions on Thursday and Friday, and cryptocurrency short-bank Signature Bank, which has lost a third of its value since Wednesday night.
He does not want a general panic
Yellen said Sunday that the government is working with the US security agency, the FDIC, on a “resolution” to the situation in the US blsas nearly 96% of financial institution deposits do not have a refund guarantee.
“I’m sure they (the FDIC) are looking at a wide range of options available, including acquisitions,” she said.
Yellen emphasized that the reforms implemented after the 2008 financial crisis closed the door to a bailout Silicon Valley Bank.
“During the financial crisis, there were investors and big bankers who were bailed out…and the reforms that were put in place mean we won’t do that again,” he said. (AFP)
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