Yellen rules out bailout of Silicon Valley Bank owners, investors
Treasury Secretary Janet Yellen said on Sunday that the U.S. would not consider a bailout of Silicon Valley Bank owners and investors after its historic failure last week, saying in the aftermath of the 2008 banking crisis that “we’re not going to do that again.”
“Well let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out,” Yellen said in an interview with CBS’s “Face The Nation.” “The reforms that have been put in place means that we’re not going to do that again. But we are concerned about depositors and are focused on trying to meet their needs.”
The collapse of the bank sent shockwaves throughout the tech industry last week, which relied heavily on the bank for financing. Federal regulators took over the bank as depositors rushed to pull cash from the company, raising fears that there could be widespread damage to the banking system.
The U.S. government faced criticism after the 2008 banking bailouts, with many thinking the government rewarded rich bank executives and shareholders for irresponsible banking and investment practices that helped sink the American economy at the time.
But while Yellen said the government was monitoring certain parts of the sector for ripple effects, she reiterated that she believes the state of the U.S. banking system is strong and that depositors should feel confident in putting their money into banks.
“America’s economy relies on a safe and sound banking system,” Yellen said. “Americans need to feel confident that the banking system is safe and sound.”
As many point to a potential purchase of Silicon Valley Bank from an outside entity as the best possible resolution, Yellen said it was up to federal regulators on how to proceed with the firm. She said she was sure officials were considering a wide range of options, including acquisitions.
–Updated at 11:43 a.m.
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