Financial regulators said on Sunday night that depositors in the failed Silicon Valley Bank will have access to all their money starting Monday, March 13.
In a joint statement, the heads of the Federal Reserve, the Treasury Department, and the FDIC said: “After receiving a recommendation from the Boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions that enabled the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, Calif., in a way that fully protects all depositors. Depositors will have access to all their money beginning Monday, March 1[ads1]3. No losses associated with the dissolution of Silicon Valley Bank will be borne by the taxpayer. “
The Federal Reserve also said it will offer funding to banks through a new facility to ensure banks can meet all depositor withdrawals.
The Fed’s funding will be made available through the creation of a new Bank Term Funding Program (BTFP), which offers loans of up to one year to banks, savings and credit unions that pledge US Treasury bonds, agency debt and mortgage-backed securities, and other qualifying assets as collateral.
According to the Fed, the BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.
The Fed said it is closely monitoring developments in financial markets.
“The Federal Reserve is prepared to meet any liquidity pressures that may arise,” the central bank said in an announcement. “This action will strengthen the banking system’s capacity to secure deposits and ensure the continuous supply of money and credit to the economy.”
In their joint statement, regulators also announced a similar systemic risk exemption for Signature Bank ( SBNY ), which was shut down on Sunday by the state’s chartering authority. All depositors of this institution will be made whole. As with the Silicon Valley Bank decision, no loss will be borne by the taxpayer.
On Friday, Silicon Valley Bank became the largest bank to fail since Seattle’s Washington Mutual during the height of the 2008 financial crisis and, behind Washington Mutual, the second largest bank failure in US history. It is also the first bank to go bankrupt since 2020.
California state regulators seized the Santa Clara-based institution and appointed the Federal Deposit Insurance Corporation as receiver, meaning the FDIC will be able to sell off assets and return money to insured depositors.
This story is breaking news and will be updated.
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