Savings of depositors safe, says US after two banks collapse

Washington, March 13: Right after two United States-based banks, Silicon Valley Bank and Signature Bank, collapsed in a matter of two-to-three days, the US government and regulators on Sunday (local time) said the actions taken so far demonstrate their commitment to ensure that depositors' savings remained safe.

"The US banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial 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 that depositors' savings remain safe," a joint statement by Treasury, Federal Reserve, and Federal Deposit Insurance Corporation said.

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Silicon Valley Bank collapsed on Friday. The crisis-hit Silicon Valley Bank's shares tumbled over 60 per cent, data showed. Following the Silicon Valley Bank, New York-based Signature Bank was closed by the state regulators on Sunday (local time), becoming the second US bank to have collapsed.

Meanwhile, US President Joe Biden on Monday morning (local time) will deliver remarks on how his government will maintain a resilient banking system after two US-based banks collapsed and were closed by regulators.

Biden assured the American people and American businesses to have confidence that their bank deposits will be there when they need them.

"I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again," a White House statement said.

As these banks collapse, the Federal Deposit Insurance Corporation (FDIC) was appointed as a receiver, which typically means it will liquidate the bank's assets to pay back its customers, including depositors, and others.

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Further, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors, the joint statement said.

- ANI

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