Home Featured Federal bailout for Silicon Valley Bank off the table, Yellen says
Federal bailout for Silicon Valley Bank off the table, Yellen says

Federal bailout for Silicon Valley Bank off the table, Yellen says

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The bank had $209 billion in assets, and many of its depositors were Silicon Valley-backed startups and health-care businesses — many of them small businesses, Yellen said. Some have payrolls to meet this week.

But although the collapse is concerning, Yellen emphasized that the American banking system is “safe and well-capitalized” and “resilient.”

Americans “can have confidence in the safety and soundness of our banking system,” Yellen said Sunday.

“We want to make sure that the troubles that exist at one bank don’t create contagion to others that are sound,” Yellen added.

Although SVB’s failure is being compared to the financial crisis of 2008 that led to the collapse of hundreds of banks across the country, there’s reason to believe the government can steer the country away from a nation-wide fiscal emergency, Gary Cohn, former director of the National Economic Council said during an interview on CNN’s “State of the Union.”

“In 2008, the regulators did not have nearly as a robust toolbox that they have today,” Cohn said. “Today, the regulators have enormous tools at their disposal. They have enormous discretion to go through and really do whatever they want in this situation. … So, I’m cautiously optimistic that they will use their tools.”

Sen. Bob Menendez (D-N.J.), agreed that the government should avoid bailing out SVB’s investors. “I’m not ready to offer them a bailout by any stretch of the imagination,” he told NBC’s Chuck Todd during an interview on Meet the Press.

The best outcome would be for the Federal Deposit Insurance Corp. to find a buyer for the bank, Sen. Mark Warner (D-Va.), said Sunday.

“I’ve been in conversations with the regulators, the administration, the [Federal Reserve], the best outcome will be, can we — can they find a buyer for this SVB bank today before the markets open in Asia later in the day?” Warner, a member of the Banking Committee said during an interview on ABC’s “This Week.”

SVB’s collapse shouldn’t be seen as a sign that banks need to more regulation, Sen. Kevin Cramer (R-N.D.) said; it’s more likely a sign of mismanagement, he said during an interview on NBC’s “Meet the Press.”

Small banks “certainly don’t need any more regulation. That doesn’t mean that you can you can be mismanaged,” Cramer said. “Maybe better oversight, but certainly not more regulation.”

House Speaker Kevin McCarthy also addressed the bank’s failure Sunday, saying the federal government was working to come up with a solution before the markets open in Asia Sunday evening.

“I have talked with the administration from [Fed Chair] Jay Powell and Janet Yellen. They do have the tools to handle the current situation. They do know the seriousness of this, and they are working to try to come forward with some announcement before the markets open, McCarthy told Fox News’ Maria Bartiromo during an interview on “Sunday Morning Futures.”

“I’m hopeful that something can be announced today.”

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