The US Federal Deposit Insurance Corporation (FDIC) and the US Federal Reserve System are considering creating a fund to protect bank deposits that could suffer after Silicon Valley Bank fails. What happened with SVB is the biggest collapse of a credit institution in the United States since 2008.
According to Bloomberg, citing informed sources, regulators discussed a special new mechanism with bank leaders. According to the publication’s interlocutors, the authors of the initiative hope in this way to “reassure depositors and curb panic.”
Additionally, US President Joe Biden met with California Governor Gavin Newsom to discuss efforts to resolve SVB, according to Reuters.
Silicon Valley Bank was the 16th largest bank in the US with a capitalization of more than $200 billion. On Friday, due to a massive outflow of funds, shares of the lending institution collapsed by 60%, as a result of which trading in its securities was halted. .
Management of the bank was transferred to a specially created FDIC institution: the Deposit Insurance Bank of Santa Clara. It is reported that 89% of deposits at SVB were uninsured.
Author:
Ahmed Sadulayev
Source: RB
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
