<p><a href="https://www.dailywire.com/topic/treasury-department" target="_blank" rel="noopener">Treasury</a> Secretary <a href="http://dailywire.com/topic/janet-yellen" target="_blank" rel="noopener">Janet Yellen</a> told members of the Senate Finance Committee on Thursday morning that the American <a href="http://dailywire.com/topic/economy" target="_blank" rel="noopener">financial</a> system “remains sound” despite two recent <a href="http://dailywire.com/topic/banks" target="_blank" rel="noopener">bank</a> failures.</p>
<p>The Federal Deposit Insurance Corporation presently manages the $212 billion in assets maintained by <a href="http://dailywire.com/topic/silicon-valley-bank" target="_blank" rel="noopener">Silicon Valley Bank</a>, which state regulators in California closed on Friday, in order to strengthen confidence in the financial system. Similar actions were taken for the $110 billion in assets maintained by Signature Bank in New York, which was closed on Sunday.</p>
<p>Yellen, originally scheduled to testify on the <a href="https://www.dailywire.com/news/more-taxes-and-more-spending-heres-what-you-need-to-know-about-president-bidens-newest-budget" target="_blank" rel="noopener">budget proposal</a> submitted last week by President Joe Biden, started her <a href="https://home.treasury.gov/news/press-releases/jy1348" target="_blank" rel="noopener">remarks</a> by informing lawmakers that the Treasury Department, the Federal Reserve, and the FDIC successfully protected the deposits of the two failed banks.</p>
<p>“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 commented. “This week’s actions demonstrate our resolute commitment to ensure that depositors’ savings remain safe.”</p>
<p>The economist added that customers of Silicon Valley Bank and Signature Bank were “able to access all of the money in their deposit accounts so they could make payroll and pay the bills” as of Monday morning. The assets were provided by the Deposit Insurance Fund, which is funded by fees on banks, while federal officials did not protect shareholders and debtholders.</p>
<p>“This week, the government took decisive and forceful actions to strengthen public confidence in our banking system,” Yellen said. “The Federal Reserve is providing additional support to the banking system with a new lending facility. This will help financial institutions meet the needs of all of their depositors.”</p>
<p>The financial tumult also colored the opening statements of Senate Finance Committee Chair Ron Wyden (D-OR) and Senate Finance Committee Ranking Member Mike Crapo (R-ID). “Nerves are frayed at the moment,” Wyden <a href="https://www.finance.senate.gov/imo/media/doc/Wyden%20Hearing%20Statement%20on%20the%20Treasury%20Budget%20Proposal.pdf" target="_blank" rel="noopener">acknowledged</a> to Yellen. “One of the most important steps the Congress can take now is make sure there are no questions about the full faith and credit of the United States.”</p>
<p>Silicon Valley Bank announced a $1.75 billion share sale last week after the company suffered heavy losses from the liquidation of long-term assets in a $21 billion bond portfolio, raising concerns among venture capital firms and startups with ties to the company about the safety of their deposits. The portfolio had declined in value due to the higher economy-wide interest rate environment caused by actions from the Federal Reserve to decrease inflation.</p>
<p>Yellen, alongside Federal Reserve Chair Jerome Powell and FDIC Chairman Martin Gruenberg, remarked in a <a href="https://www.fdic.gov/news/press-releases/2023/pr23017.html" target="_blank" rel="noopener">statement</a> on Sunday that the banking system “remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry.” They promised that “no losses” associated with the collapse of Silicon Valley Bank would be “borne by the taxpayer.”</p>
<p>The vast majority of deposits at Silicon Valley Bank, which offered services to nearly half of the venture-backed technology and healthcare firms in the United States, exceeded the $250,000 threshold typically insured by the FDIC. Regulators scrambled to guarantee all deposits at Silicon Valley Bank such that the remainder of the financial system, in which roughly half of the deposits surpass $250,000, would remain protected.</p>
<p>“I am concerned about the precedent of guaranteeing all deposits and the market expectation moving forward,” Crapo <a href="https://www.finance.senate.gov/imo/media/doc/Crapo%20Statement%20at%20Hearing%20on%20The%20President's%20FY2024%20Budget_031623.pdf" target="_blank" rel="noopener">told</a> Yellen, noting that “rising interest rates” induced by Federal Reserve efforts to combat inflation are “impacting household budgets, the federal government’s coffers, and, as we saw this week, our banking system.”</p>

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Yellen Tells Lawmakers That The American Banking System ‘Remains Sound’ After Two Banks Collapse