Janet Yellen: US authorities will help depositors of other banks if necessary

US Treasury Secretary Janet Yellen yesterday statedthat the authorities of the country will provide assistance to depositors of American banks, if such a need arises. Speaking at a meeting of the American Bankers Association, Ms. Yellen commented on the interference of the authorities in situation with bankrupt banks Silicon Valley Bank and Signature, where many deposits were placed that are not subject to federal insurance rules.

“We have worked with the Fed and the Federal Deposit Insurance Corporation to protect all depositors of these banks. These measures were taken not to help these particular banks or any particular segment of banks, but to protect the entire US banking system. And we will do the same if smaller financial firms suffer a flight of savers fearful of a worsening crisis. I believe that the measures we have taken have significantly reduced the risks of new bankruptcies, which would bring new losses to the federal authorities and other banks.”

Ms. Yellen also announced the launch of a new federal program to provide additional liquidity to banks, the Bank Term Funding Program. “Now the situation is stabilizing,” said Ms. Yellen. – The American banking system remains stable. The outflow of funds from the deposits of regional banks has stabilized. We continue to closely monitor the situation. My team and I personally are in close contact with federal and regional regulators, banking market participants, and foreign parties.”

Read more about the situation in the banking sector in the material “Away from American Banks”.

Evgeniy Khvostik