Federal Reserve Board – Joint Statement by Treasury, Federal Reserve, and FDIC

Washington, DC – Treasury Secretary Janet L. Yellen, Federal Reserve Board Chairman Jerome H. Powell and FDIC Chairman Martin J. The following statement was released by Gruenberg:

Today, we are taking decisive action to protect the American economy by strengthening public confidence in our banking system. The move will ensure that the US banking system continues its important role of protecting deposits and providing households and businesses access to credit in a way that fosters strong and sustainable economic growth.

After receiving a recommendation from the boards of the FDIC and the Federal Reserve and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, which Fully protects all depositors. , Depositors will have access to all their funds from Monday, March 13. Any losses associated with the resolution of Silicon Valley Bank will not be borne by the taxpayer.

We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All the depositors of this institution will be made whole. As per the resolution of Silicon Valley Bank, no loss will be borne by the taxpayer.

Shareholders and certain unsecured debt holders will not be protected. Senior management has also been removed. Any loss to the Deposit Insurance Fund to support uninsured depositors will be recovered by special assessment of banks, as required by law.

Finally, the Federal Reserve Board announced on Sunday that it would make additional funding available to eligible depository institutions to help ensure banks’ ability to meet the needs of all their depositors.

The US banking system remains resilient and on a solid footing due to reforms undertaken after the financial crisis that ensured better safeguards for the banking industry. Those reforms, along with today’s actions, demonstrate our commitment to taking necessary steps to safeguard depositors’ savings.