Silicon Valley Bank, one of the top banks in the United States, is set to open trade in Asia on 13th March. To protect the deposits of SVB several Feds in the US are ready to take appropriate actions.
The Federal Deposit Insurance Corporation (FDIC) took over Silicon Valley Bank’s activities. This guarantees member bank accounts up to $250,000 after Silicon Valley Bank was shut down by California banking regulators on Friday. SVB’s failure is the second biggest collapse after the 2008 mutual fund crisis. The bank had $209 billion in assets and around $175 billion in deposits till December 2022.
Back-to-back collapses of three banks in the United States have raised serious questions about its monetary policy and vigilance network.
Experts have cautioned against the failure of the Silicon Valley Bank for a very long time. The rise in inflation led to the collapse of SVB according to them. Customers are showing their resentment as authorities were unable to protect the bank’s collapse.
According to recent reports, Federal Authorities are looking forward to protecting all uninsured at Silicon Valley Bank. The information regarding this step came from anonymous people and they decided to provide information after ensuring their anonymity. Famous Fed reserves like FDIC, United States Treasury, and the White House are in a race to provide security to uninsured deposits.
California State regulators have placed the failed bank under FDIC to ensure the security of deposits. After this decision, the FDIC bid on an auction for the assets of banks on 12 March at 2 PM.
However, on 12th March Treasury Secretary Janet Yellen said that they are not interested in providing any bailout package to Silicon Valley Bank in near future. She also added that they are looking to address the needs of depositors.
It is yet to witness the real impact of this collapse when the market will open in Asian countries like China and Japan. To protect the uninsured deposits of the Silicon Valley Bank top Feds have decided to provide some relief to depositors. According to reports around 86% of funds deposited in Silicon Valley Bank were uninsured. It will be interesting to see how much depositors will benefit due to these potential measures.