White House officials are assuring the public that the failure of Silicon Valley Bank, the largest since the 2008 global financial crisis, won’t touch off another string of bank collapses.
White House officials scrambled Friday to persuade Americans they should still have confidence in the banking system.
“Our banking system is far more resilient than it was in 2008. We’ve learned a lot and have better tools, specifically, so we can protect important investments of Americans,” said Cecilia Rouse, chair of the White House Council of Economic Advisors.
Federal regulators earlier Friday closed the bank and took control of its deposits, the Federal Deposit Insurance Corp. announced. It is the second-biggest bank failure in U.S. history after a run on deposits crashed the tech-focused lender’s plan to raise new capital.
The FDIC said it has taken control of the bank through a new entity called the Deposit Insurance National Bank of Santa Clara. All of the bank’s deposits have been transferred to the new entity.
Silicon Valley Bank’s collapse leads to several questions and significant uncertainty among the tech community. At the time it collapsed, it was the 19th largest bank in the U.S.
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Speaking at the daily press briefing, Ms. Rouse said the administration does not anticipate a ripple effect impacting the entire banking system. She said Americans should have full faith and confidence in regulators, including the FDIC and Treasury Department.
The FDIC’s standard insurance covers up to $250,000 per depositor, per bank for each account ownership category. The regulator said uninsured depositors will get receivership certificates for their balances.
But what happens to depositors with more than $250,000 in Silicon Valley Bank remains an open question.
• Jeff Mordock can be reached at jmordock@washingtontimes.com.
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