US regulators announced that it has taken steps to “fully” protect all deposits with Silicon Valley Bank (SVB); CNBC Reported. The institution has a number of start-ups and established companies such as Roku and Etsy that will have full access to funds starting today. At the same time, officials said there was “no remedy” and that shareholders and unsecured creditors would not be protected.
“Today, the FDIC, Treasury Department, and Federal Reserve Board (FRB) are taking decisive action to protect the U.S. economy by strengthening public confidence in the banking system,” said a joint statement. . “Depositors will have access to all funds beginning Monday, March 13. Losses related to the Silicon Valley Bank resolution will not be borne by taxpayers.”
The FDIC took over the SVB on Friday following the biggest US bank collapse in almost 15 years. Concerned that many tech startups and companies will be unable to pay their salaries, Etsy said yesterday that payments to merchants could be delayed. On Friday, Roku announced that the collapse could cost him 26% of his cash reserves, or more than $487 million.
Above the SVB was the Signature Banks. Regulatory closure On the weekend. Coinbase exchange is one of the largest banks used by cryptocurrency companies as it had $240 million in deposits in the bank. In the same joint statement, federal regulators stated, “All depositors of this institution shall: [also] become complete. ”
Another popular institution in the crypto exchange, Silvergate (known for its purchase of Diem, an ambitious Facebook-funded crypto project), went bankrupt on March 8th. This shows that three major banks with ties to tech companies closed within a week of him.
To reassure depositors uneasy about these events, the government said it would provide additional funds to other eligible institutions. In exchange for , government bonds and other safe government securities can be pledged as collateral. It is designed to fix a key problem that led to the SVB’s failure: the unrealized losses in government securities caused by the rapid rise in interest rates.
“The U.S. banking system remains resilient and well-founded, in large part because post-crisis reforms have made the banking industry safer,” the joint statement said. “it is written like this. “These reforms combined with today’s actions demonstrate our commitment to taking the necessary steps to keep depositors’ savings safe.”