Biden discussed with the governor of California the consequences of the bankruptcy of Silicon Valley Bank

US President Joe Biden discussed with California Governor Gavin Newsom the situation with the bankruptcy of Silicon Valley Bank, the White House press service reported. According to BloombergThe Federal Reserve is considering creating a fund that will allow it to support more deposits at banks that have been struggling since the Silicon Valley crash.

“The President and Governor discussed the Silicon Valley bank situation and efforts to resolve it,” the White House said in a statement.

According to Bloomberg sources familiar with the matter, regulators discussed the new mechanism in conversations with bank executives. According to the agency, they hope that this will reassure depositors.

Problems at Silicon Valley Bank began after the closure of another bank – Silvergate Bank — who has worked with cryptocurrencies and startups. The very next day, Silicon Valley Bank shares collapsed by 60%. Investors began to rapidly withdraw funds from their accounts and sell industry shares, after which the problems began at Signature Bank, Western Alliance and First Republic.

16th largest bank in the US Silicon Valley Bank was recognized bankrupt March 11th. At the end of 2022, 89% of the bank’s deposits, or about $175 billion, were not insured. This bankruptcy was the largest since the 2008 crisis.

Anastasia Larina