Yellen says regs might cover deposits of other struggling banks

Janet Yellen

Treasury Secretary Janet Yellen said Tuesday federal regulators are willing to extend the same financial assistance—perhaps even extended deposit insurance—to mid-sized banks struggling to handle the fallout from the failures of Silicon Valley Bank (SVB) and Signature Bank.

Yellen, in remarks before the American Bankers Association, said similar intervention regulators offered the two failed banks “could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”

The Federal Deposit Insurance Corporation (FDIC) insured all $264 billion in combined deposits at SVB and Signature Bank, despite nearly 90 percent of the funds being in high-value accounts with balances above the agency’s $250,000 limit. The FDIC also offered loans to struggling banks to help them avoid selling off Treasury notes and mortgage-backed securities at a loss to fully fund withdrawal requests by depositors.

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