The US Government Took Extraordinary Measures After The Bankruptcy Of The Silicon Valley Bank
US authorities on Sunday (March 12) took extraordinary measures to shore up confidence in the banking system after the bankruptcy of Silicon Valley Bank threatened to trigger a wider financial crisis.
The California regulator closed the bank, the 16th largest in the United States, on Friday and named the Federal Deposit Insurance Corporation (FDIC) the recipient of its assets, which stood at about $209 billion at the end of 2022.
This is the largest bankruptcy in the US financial industry since 2008.
After a dramatic weekend, regulators said Silicon Valley Bank customers will have access to all their deposits from Monday and created a new mechanism to give banks access to emergency funding. The Federal Reserve has also made it easier for banks to borrow from it in an emergency.
“We believe that the steps taken by the Fed Treasury and Federal deposit insurance corporation (FDIC), will decisively break the psychological “loop of death” in the regional banking sector“, – said Carl Chamotta, chief market strategist at Corpay in Toronto.
