Treasury Secretary Janet Yellen on Friday responded to the biggest failure in more than a decade by a US lender by declaring the US banking system “remains resilient” and that regulators have “effective” handling of the collapse of the Silicon Valley bank. equipment”.
Yellen called a meeting with Federal Reserve leaders on Friday Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency to discuss developments surrounding the SVB, Treasury said in an emailed statement.
Regulators stepped in on Friday and seized the bank in a surprising collapse for a lender that had quadrupled in size over the past five years and was valued at more than $40 billion as recently as last year. What followed was a tumultuous week that saw a failed attempt to raise capital and an exodus of cash from the tech startups that had fueled the lender’s rise.
Just days earlier, Silvergate Capital Corp. also announced it was closing its bank.
The combination triggered a widespread selloff in industry stocks. The Treasury statement appeared aimed at reassuring financial markets and preventing widespread investor panic.
In the US, Thursday was the worst day for the KBW Bank Index since June 2020, as its members lost more than $90 billion in value. Europe’s biggest banks lost more than $40 billion from their market capitalization on Friday.
The agency chief Yellen convened on Friday are all members of the Financial Stability Oversight Council, a body of regulators that monitors risks to US financial stability.
The text of this story is published from a wire agency feed without any modification.
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