The US government says individuals and businesses who have money in the Silicon Valley Bank will have access to and recover all their money.
President Joe Biden will address the dramatic the issue later today, reports BBC. The president promised to “hold those responsible for this mess fully accountable”, says the report. New York based bank, Signature Bank was also closed by regulators.
The Treasury Department, Federal Reserve and Federal Deposit Insurance Corporation (FDIC) said in a statement that all Silicon Valley Bank clients will be protected and have access to their funds. Taxpayers will not bear the losses, said the statement.
The joint statement said “the US banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial that crisis that ensured better safeguards for the banking industry.”
“Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure depositors’ savings remain safe.” This will also apply to Signature Bank of New York which came under regulatory control on Sunday, said BBC.
On Friday, U.S banking regulators had to urgently close Silicon Bank when depositors started withdrawing billions of dollars from the bank within hours. Regulators have also reportedly unveiled a new way to give banks access to emergency funds.
According to BBC, the Federal Reserve said it would offer support through a new Bank Term Funding Program, making it easier for banks to borrow from it in a crisis.
However, HSBC announced that it has acquired the Silicon Valley Bank UK Limited for £1. The statement released by HSBC on Monday says the acquisition will strengthen its operations in the UK.
“This acquisition makes excellent strategic sense for our business in the UK”, said HSBC Group CEO, Noel Quinn. “It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally.”
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