The U.S. banking system “remains sound” and Americans can feel “confident” about their deposits with no need to panic over recent events, Treasury Secretary Janet Yellen is set to tell the Senate Finance Committee on Thursday.
Her testimony will come a week after the second-largest bank collapse in U.S. history.
AP reports Yellen will be the first Biden administration official to face lawmakers over the decision to protect uninsured money at two failed regional banks, a move critics labelled as a bank “bailout.”
“The government took decisive and forceful actions to strengthen public confidence” in the U.S. banking system, Yellen says in prepared testimony released before her appearance.
The collapse of Silicon Valley Bank has resulted in finger-pointing and blame being passed around the financial tech industry. https://t.co/Z3nh1lS4MR
— Breitbart News (@BreitbartNews) March 13, 2023
“I can reassure the members of the Committee that our banking system remains sound, and that Americans can feel confident that their deposits will be there when they need them.”
She made no reference in the prepared remarks to the situation surrounding Credit Suisse, which saw its shares plunge on Wednesday before regulators pledged a liquidity lifeline to the flagship Swiss lender, as Breitbart News reported.
Yellen’s words of reassurance come against a tumultuous week for the international banking system.
In the past seven days Silicon Valley Bank (SVB), based in Santa Clara, California, failed after depositors rushed to withdraw money amid anxiety over the bank’s ongoing health.
CONTAGION: Customers Line Up Outside First Republic Bank to Withdraw Money After SVB Collapse
Credit: @Dr_PhillipB via Spectee /TMX
Regulators then convened over the weekend and announced New York-based Signature Bank also failed.
All depositors, including those holding uninsured funds exceeding $250,000, were subsequently reassured they remained protected by federal deposit insurance.