The move to protect Silicon Valley Bank depositors arose over fears that tech startups, which favored the bank, might be forced to shut down or furlough employees due to a cash squeeze if their uninsured deposits weren’t available to tap for their ongoing operations - and to ward off runs against other banks with a high percentage of uninsured deposits. “Americans can have confidence that the banking system is safe,” Biden said during a short speech. On Monday, President Joe Biden sought to reassure worried depositors and called for stricter regulations aimed at preventing bank failures. senators during a briefing, the Wall Street Journal reported. Officials said clients there would also be able to access all of their money.įederal officials said they will also attempt another auction of Silicon Valley Bank after a first failed attempt to find a buyer, the FDIC told U.S. On Sunday, regulators closed a second bank, the New York City-based Signature Bank, which lends money to law firms and real estate companies. The regulatory actions came after the bank for numerous Silicon Valley startups and tech companies spiraled into insolvency and was seized on Friday. The Federal Deposit Insurance Corp., which insures bank deposits, said Monday that it moved to protect depositors by transferring all of Silicon Valley Bank’s insured and uninsured deposits, “and substantially all assets” of the former bank, to a “newly created, full-service FDIC-operated ‘bridge bank.’ ” The bank was the largest bank to fail since the 2008 financial crisis. Separately, shares of another Bay Area regional bank plunged. SANTA CLARA - Federal officials reassured customers of the failed Silicon Valley Bank that they will not lose their money Monday in a bid to inoculate the nation’s banking system against a run on deposits, yet scores of people lined up at its Santa Clara headquarters before the doors opened.
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