Breaking Christian News

Silicon Valley's Financial Crisis: Feds Tell Depositors at Failed Banks: You'll Get Your Money

Dale Hurd : Mar 13, 2023
CBN News

"You know what? The sad part of the story is, if they do get bailed out, it will be because they bought that kind of [woke] social insurance. And I have written about this in 'Woke, Inc' ... I think the government needs to get out of the way. And if another bank actually wants to buy and save Silicon Valley Bank through the private sector itself, they should be permitted to do that." -Vivek Ramaswamy, via CNS News

[CBN News] After the failure of Silicon Valley Bank and then Signature Bank of New York, which invested in crypto currencies, the Treasury Department and banking regulators are now promising depositors they will have access to all their funds when branches open today. (Screengrab image)

The Feds took action after damage from the second-biggest bank failure in US history began to create a panic and rippled around the world

"I think that without this, there could have been some serious runs on other banks," said William Cohen, founding partner at the news website Puck, "because there would have been a loss of confidence throughout the whole system."

The turmoil began Wednesday when Silicon Valley Bank, a major lender in the troubled tech industry, tried to sell assets to boost its balance sheet after losing money in bond investments when the Federal Reserve raised interest rates.

That panicked investors as customers raced to withdraw funds after seeing the news on social media.

The feds stepped in, tying up $150 billion in deposits and putting some banks and tech companies at risk.

Treasury Secretary Janet Yellen says the emergency measures put in place are not a bail-out because the funds will come from an FDIC account, a pool of money paid into by US banks.

"We are concerned about depositors and are focused on trying to meet their needs," Yellen said.

But while depositors at the banks will be protected, stock and bondholders will not be.

The crisis had already spread to Britain where Silicon Valley Bank had a subsidiary.

The UK Treasury and the Bank of England "facilitated the sale″ of Silicon Valley Bank UK to HSBC and ensured the security of deposits. Subscribe for free to Breaking Christian News here