US Treasury Secretary Janet Yellen is working on SVB collapse, not on rescue operations: Report

US Treasury Secretary Janet Yellen is reportedly working with regulators to address the Silicon Valley Bank collapse and protect investors, but is not considering a major bailout.

Yellen made the comments during an interview with CBS News on March 12, claiming that regulators are formulating “appropriate policies to deal with the situation” at the bank. She stated:

“During the financial crisis, it was investors and owners of systemic large banks that were bailed out, and we are certainly not looking. And the reforms that have been put in place mean that we will not do that again. But we are concerned about depositors and are focused on trying to meet their needs.”[ads1];

Regarding the fact that most accounts at SVB are unsecured, Yellen noted that regulators are “very aware of the problems that depositors will have, many of them are small businesses that employ people all over the country. And of course, this is a significant concern, and work with regulators to try to address those concerns.”

Yellen also spoke about the possibility of other regional US banks being affected by the Silicon Valley collapse:

“Let me just say that we want to make sure that the problems that exist in one bank do not cause contagion to others who are responsible. And the goal is always supervision and regulation is to make sure that contagion cannot” not occur.”

Data from the Federal Reserve shows that small banks in the U.S. had $6.8 trillion in assets and $680 billion in equity as of February 2023. A failure of the tech bank would “risk a run on thousands of small banks,” as reported by Cointelegraph.

Related: Silicon Valley Bank failure could spark run on US regional banks

Silicon Valley Bank is one of the 20 largest banks in the US, and provides banking services to many crypto-friendly venture firms. According to a Castle Hill report, assets from Web3 venture capitalists totaled more than $6 billion in the bank, including $2.85 billion from Andreessen Horowitz, $1.72 billion from Paradigm and $560 million from Pantera Capital.

According to Yellen, the Federal Deposit Insurance Corporation (FDIC) is considering “a wide range of available options,” including acquisitions from foreign banks. “We are certainly working to resolve the situation in a proper manner,” she noted.

Silicon Valley was shut down by California’s financial watchdog on March 10 after announcing a significant sale of assets and shares aimed at raising $2.25 billion in capital to shore up its operations. The FDIC was appointed receiver to protect insured deposits. However, the FDIC only insures up to $250,000 per depositor, per institution and per ownership category.

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