After Silicon Valley Bank Collapse, Treasury Department Focuses on Helping Depositors, Not Shareholders
The shutdown of Silicon Valley Bank, one of the leading lenders to the tech sector, has caused a ripple effect of fear and concern around the banking sector. The bank’s Friday failure marked the second-largest bank collapse in U.S. history, after the 2008 financial crisis.
On Sunday's “Face the Nation” on CBS, Treasury Secretary Janet Yellen stated that there wouldn't be a bailout, however, the federal government is attempting to come up with a solution to assist depositors.
“Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out, and we’re certainly not looking. And the reforms that have been put in place means that we’re not going to do that again,” Yellen said.
Shalanda Young, the director of the White House Office of Management and Budget, said during an appearance on CNN’s “State of the Union” the U.S.’s banking system is “resilient” amid the fallout of the Silicon Valley Bank collapse.
On Sunday, Senator Bob Menendez (D-N.J.) declared that he isn't yet ready to allow the federal government to furnish Silicon Valley Bank with a bailout following its downfall, which caused a stir in the tech industry last week. Senator Mark Warner, a Democrat from VirginiaSenator X, a member of the Senate Banking Committee, expressed his belief on Sunday that the “best outcome will be an acquisition.”
Former chair of the Federal Deposit Insurance Corporation, Sheila Bair, expressed on Sunday that the most desirable result after the closure of Silicon Valley Bank by regulators last week due to worries about its solvency would be to find a buyer for it.
Sen. Warner, who voted in 2018 for a law that eased regulations on mid-sized banks, said on ABC’s “This Week” that he believes the “best outcome will be an acquisition” of Silicon Valley Bank.
The U.S. banking system has grown more resilient since the 2008-2009 financial crisis, due to reforms that have been put in place since, but for now, the Treasury Department is focusing on helping depositors, not shareholders, amid the Silicon Valley Bank collapse.
0. “Mace doesn’t support a bailout for Silicon Valley Bank” The Hill, 12 Mar. 2023, https://thehill.com/homenews/sunday-talk-shows/3896094-mace-doesnt-support-a-bailout-for-silicon-valley-bank
1. “Silicon Valley Bank Collapse Becomes Campaign Topic as GOP Warns Against Bailout” The Wall Street Journal, 12 Mar. 2023, https://www.wsj.com/articles/silicon-valley-bank-collapse-becomes-campaign-topic-as-gop-warns-against-bailout-73c97b04
2. “Senator says ‘see what happens' before considering Silicon Valley Bank bailout” Yahoo! Voices, 12 Mar. 2023, https://www.yahoo.com/gma/senator-says-see-happens-considering-133133551.html
3. “Menendez says he’s not ready to offer Silicon Valley Bank a bailout ‘by any stretch of the imagination’” The Hill, 12 Mar. 2023, https://thehill.com/homenews/sunday-talk-shows/3896290-menendez-says-hes-not-ready-to-offer-silicon-valley-bank-a-bailout-by-any-stretch-of-the-imagination
4. “Video: Sen. Mark Warner Comments on Silicon Valley Bank Collapse and How Tightly Mid-Sized Banks Should Be …” Blue Virginia, 12 Mar. 2023, https://bluevirginia.us/2023/03/video-sen-mark-warner-comments-on-silicon-valley-bank-collapse-and-how-tightly-mid-sized-banks-should-be-regulated-says-tiktok-absolutely-should-be-banned
5. “Former FDIC chair Bair says buyer for Silicon Valley Bank is the ‘best outcome’” NBC News, 12 Mar. 2023, https://www.nbcnews.com/politics/politics-news/former-fdic-chair-bair-says-buyer-silicon-valley-bank-best-outcome-rcna74538
6. “Former FDIC chair Bair says buyer for Silicon Valley Bank is the ‘best outcome’” AOL, 12 Mar. 2023, https://www.aol.com/news/former-fdic-chair-bair-says-140139493.html