US: country’s banking system remains solid, says Yellen – 03/16/2023 – Market
The Secretary of the Treasury of the United States, Janet Yellen, is going to try, this Thursday (16), to convince the American senators of the soundness of the country’s banking system, after the bankruptcy of the SVB bank (Silicon Valley Bank) and at a time when Credit Suisse setbacks raise fears of contagion.
According to the text of her speech, released this morning, Yellen will address members of the Senate Banking Committee to “assure them […] that our banking system remains strong and that Americans can be confident that the money they deposit will be available when they need it.”
“This week’s actions demonstrate our firm commitment to guarantee the security of account holders’ deposits”, he will say.
Yellen will be heard by senators under President Joe Biden’s 2024 budget bill, which was introduced just a week ago. But her words about the situation in the banking sector, which is roiling markets, will also be scrutinized.
On Sunday (12), US authorities announced that they will guarantee SVB account holders full withdrawal and will allow access to all deposits at Signature Bank, a bank in New York that was closed by the US regulator.
In addition, the Fed (Federal Reserve, US central bank) has committed to lending the necessary funds to other banks that need them to meet the withdrawal requests of their customers.
“We worked with the Federal Reserve and the FDIC (Federal Deposit Insurance Corporation) to protect all account holders at the two failing banks. payments and pay your bills”, recalls Yellen, while “shareholders and creditors are not protected by the government”.
“It is important to point out that, with this action, taxpayers’ money is not being used or risked.”