Lawmakers created the Federal Deposit Insurance Corporation, also known as the FDIC, in the first years of the Great Depression in order to prevent <a href="http://dailywire.com/topic/banks" target="_blank" rel="noopener">bank</a> runs and restore faith in the financial system. Some lawmakers are considering revisions to the present deposit insurance limit of $250,000 as the <a href="http://dailywire.com/topic/economy" target="_blank" rel="noopener">economy</a> grapples with the second-largest bank failure in American history.
<a href="http://dailywire.com/topic/silicon-valley-bank" target="_blank" rel="noopener">Silicon Valley Bank</a> provided services to half of venture-backed technology and healthcare firms in the United States; the vast majority of customers therefore maintained deposits well above the $250,000 threshold backed by the FDIC, since businesses generally require larger sums of liquid assets to conduct operations and compensate employees.
When the FDIC was forced to take over the company on March 10, however, officials guaranteed deposits both above and below the $250,000 threshold in order to prevent bank runs at other financial institutions. Signature Bank, another company with a substantial majority of large depositors, collapsed on March 12 and was likewise taken over by the FDIC.
Sen. Elizabeth Warren (D-MA) and Rep. Maxine Waters (D-CA) have each <a href="https://www.dailywire.com/news/top-democrats-say-fdic-should-reexamine-250000-deposit-insurance-threshold" target="_blank" rel="noopener">suggested</a> in recent days that the $250,000 limit should be reexamined. Lawmakers have indeed raised the deposit insurance threshold over the years: the FDIC only offered $2,500 of deposit insurance in 1934, a threshold which gradually increased to $100,000 in 1980 before reaching $250,000 with the financial reforms that occurred amid the Great Recession in 2008. The FDIC funds deposit insurance through fees on covered banks rather than taxpayer dollars.
Treasury Secretary Janet Yellen has <a href="https://www.dailywire.com/news/yellen-walks-back-implicit-support-for-large-bank-account-holders-prompts-investor-unease" target="_blank" rel="noopener">sent</a> mixed signals about whether officials would continue to support both insured and uninsured deposits, prompting unease among some investors.
David Bahnsen, the founder of Manhattan-based wealth management firm The Bahnsen Group, told The Daily Wire that he expects authorities to maintain assumptions that there is an “implicit” unlimited amount of FDIC coverage available while leaving the codified $250,000 threshold intact. Such an approach, however, would “improperly price risk and protection, and create a moral hazard for depositors, and indeed the broader financial system.”
He added that the creation of an explicit system centered around unlimited FDIC coverage would require congressional approval, which regulators “clearly want to avoid,” as well as increased payments from the “low-margin banking system.”
Silicon Valley Bank fulfilled withdrawal requests by selling a long-term bond portfolio that had declined in value amid Federal Reserve actions over the past year to hike interest rates, moves which followed excessive monetary stimulus in response to the lockdown-induced recession. Assets in the overall banking system are now $2 trillion lower than their book value, according to a <a href="https://www.dailywire.com/news/banking-system-is-sound-and-government-will-back-deposits-at-smaller-banks-yellen-promises" target="_blank" rel="noopener">study</a> from analysts at the National Bureau of Economic Research.
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Bahnsen noted that the fractional reserve banking system, under which financial institutions only maintain a portion of deposits immediately available since account holders generally do not need instant access to all of their funds, will always carry some degree of bank run risk. He asserted that actions from the Federal Reserve nevertheless prompted the current volatility.
“All levered finance means financial contagion risk is a very real thing when confidence falters, and faltering confidence is the ultimate self-fulfilling prophecy,” Bahnsen continued. “The two causes of the Silicon Valley Bank implosion were the Federal Reserve’s loose policy and the Federal Reserve’s tight policy. Fractional reserve banking was a problem for Silicon Valley Bank only after the Federal Reserve policies created a boom then created a bust.”

Silicon Valley Bank Collapse

As Multiple Banks Implode, Insurance Deposit Limit Receives Renewed Scrutiny 

Bank Insurance Deposit Limit Receives Renewed Scrutiny 

Banks

Economy

Silicon Valley Bank

Treasury Department

U.S.

<a href="https://www.dailywire.com/topic/republican-party" target="_blank" rel="noopener">Republican</a> lawmakers at the state and federal levels have introduced multiple bills this week meant to prohibit or discourage the <a href="http://dailywire.com/topic/federal-reserve" target="_blank" rel="noopener">Federal Reserve</a> from creating a central bank digital currency, also known as a CBDC.
Opponents of the so-called digital dollar contend that the asset, which would be managed by central bankers and tethered to the value of the physical dollar, would enable and increase government surveillance and control of private citizens. Sen. Mike Lee (R-UT) <a href="https://www.lee.senate.gov/services/files/2F3D168A-6B2E-47D4-B47F-C706AEC16EE7" target="_blank" rel="noopener">proposed</a> one such piece of legislation on Thursday, comparing a potential digital dollar in the United States to an experimental digital yuan slated to be unveiled in China.
“Presently, the Federal Reserve is in the process of researching and developing its own CBDC that would, like China’s, centralize the government’s control over the economy, while strangling our fundamental liberties,” Lee said in a <a href="https://www.lee.senate.gov/services/files/493D0C95-997D-4BB3-BFE2-5A91AB0FE55C" target="_blank" rel="noopener">summary</a> of his legislation. “An American CBDC would offer citizens nothing that they cannot already obtain through private financial innovation. Instead, it could make their every transaction known to the Federal Reserve, while converting banks and credit unions into merely wallets rather than private lending institutions.”
President Joe Biden has backed the study of a possible CBDC and <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/16/fact-sheet-white-house-releases-first-ever-comprehensive-framework-for-responsible-development-of-digital-assets/" target="_blank" rel="noopener">launched</a> a “whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.” The Federal Reserve recently <a href="https://www.dailywire.com/news/federal-reserve-launches-digital-dollar-initiative-days-after-leading-cryptocurrency-firm-goes-under" target="_blank" rel="noopener">conducted</a> a study with Citi, Mastercard, BNY Mellon, and other financial institutions to determine the “feasibility of payments between financial institutions” using a digital dollar.
Sen. Ted Cruz (R-TX) and Sen. Mike Braun (R-IN) are also listed as <a href="https://www.dailywire.com/news/simply-a-bad-idea-ted-cruz-introduces-bill-to-stop-creation-of-a-central-bank-digital-currency" target="_blank" rel="noopener">sponsors</a> of the bill, which would amend the Federal Reserve Act such that financial authorities cannot “mint or issue” a CBDC directly to an individual or to a digital currency intermediary.
Similar legislation was <a href="https://emmer.house.gov/2023/2/emmer-leads-effort-to-squash-financial-surveillance-state-initiatives" target="_blank" rel="noopener">introduced</a> last month in the House by Rep. Tom Emmer (R-MN) and nine other sponsors. “Any digital version of the dollar must uphold our American values of privacy, individual sovereignty and free market competitiveness. Anything less opens the door to the development of a dangerous surveillance tool,” Emmer said. “After all, America remains a technological leader not because we force innovations to adopt our values under regulatory duress, but because we allow technology that holds these values at their core to flourish.”
Survey results from the Cato Institute shared last week with The Daily Wire indicate that sizable majorities of Americans <a href="https://www.dailywire.com/news/federal-reserve-officials-are-testing-a-central-bank-digital-currency-heres-what-that-means-for-your-financial-freedom" target="_blank" rel="noopener">oppose</a> the creation of a CBDC, especially if the technology caused the end of physical cash or permitted officials to monitor transactions.
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The advent of a CBDC could emerge as an issue in the forthcoming Republican presidential primary race. Vivek Ramaswamy, an asset management executive and contender for the Republican nomination, has pressed every Republican candidate to <a href="https://twitter.com/VivekGRamaswamy/status/1638254539156385792" target="_blank" rel="noopener">denounce</a> digital dollar initiatives. Gov. Ron DeSantis (R-FL) <a href="https://www.dailywire.com/news/desantis-unveils-plan-to-battle-bidens-efforts-to-inject-a-centralized-bank-digital-currency" target="_blank" rel="noopener">unveiled</a> a proposal this week designed to prohibit the use of a CBDC in Florida and encouraged other states to follow suit, while Gov. Kristi Noem (R-SD) <a href="https://www.dailywire.com/news/south-dakota-governor-kristi-noem-vetoes-central-bank-digital-currency-bill" target="_blank" rel="noopener">vetoed</a> legislation that would have classified the asset as money in South Dakota. Neither DeSantis nor Noem have officially declared their candidacies for the Republican nomination.

Sen. Mike Lee.

Republicans Lead Charge Against Biden’s Push For Central Bank Digital Currency

Republicans At State And Federal Level Lead Charge Against Biden’s Push For Central Bank Digital Currency

Biden Administration

Federal Reserve

Money

Republicans

<a href="http://dailywire.com/topic/elon-musk" target="_blank" rel="noopener">Elon Musk</a> rebuked the <a href="http://dailywire.com/topic/white-house" target="_blank" rel="noopener">White House</a> for announcing newly protected natural resources and touting efforts to fight <a href="http://dailywire.com/topic/climate-change" target="_blank" rel="noopener">climate change</a> as the nation contends with a <a href="http://dailywire.com/topic/banks" target="_blank" rel="noopener">banking</a> crisis.
President Joe Biden <a href="https://twitter.com/POTUS/status/1638605469433442311" target="_blank" rel="noopener">said</a> on social media Wednesday that he would direct Commerce Secretary Gina Raimondo to consider designating 777,000 square miles of the Pacific Ocean south of Hawaii as a national marine sanctuary. “That’s an area larger than Alaska and Colorado put together and three times the size of Texas,” the commander-in-chief commented.
Biden added that his administration has “made the largest investment to fight climate change” in the history of the nation. “Umm… the banks are melting,” Musk <a href="https://twitter.com/elonmusk/status/1638835092280995840" target="_blank" rel="noopener">replied</a>, earning more than nine times the number of likes and five times the number of retweets as the original post from Biden.
The remarks from Biden about conservation and environmental protection indeed come shortly after the collapse of Silicon Valley Bank, where the Federal Deposit Insurance Corporation was forced to guarantee the funds of account holders with balances surpassing the $250,000 threshold typically insured by the government-backed corporation. Financial authorities such as Treasury Secretary Janet Yellen have since <a href="https://www.dailywire.com/news/yellen-walks-back-implicit-support-for-large-bank-account-holders-prompts-investor-unease" target="_blank" rel="noopener">scrambled</a> to reassure markets that the banking system remains sound and that the Biden administration would meaningfully prevent bank runs.
Silicon Valley Bank fulfilled withdrawal requests by selling a long-term bond portfolio that had declined substantially in value amid Federal Reserve actions to hike interest rates. Monetary policymakers have been forced to risk a <a href="https://www.dailywire.com/news/federal-reserve-hikes-target-interest-rates-by-quarter-point-as-officials-balance-fighting-inflation-and-protecting-banks" target="_blank" rel="noopener">recession</a> with the rate hikes in order to combat the record <a href="https://www.dailywire.com/news/biden-says-economy-will-continue-to-make-progress-after-another-dismal-inflation-report" target="_blank" rel="noopener">inflation</a> witnessed in the two years since Biden assumed office. Assets in the banking system are now $2 trillion lower than their book value as a result of the rollback in monetary stimulus, according to a <a href="https://www.dailywire.com/news/banking-system-is-sound-and-government-will-back-deposits-at-smaller-banks-yellen-promises" target="_blank" rel="noopener">study</a> from analysts at the National Bureau of Economic Research.
Musk, who serves as the chief executive of Tesla, SpaceX, and Twitter, has frequently criticized the Biden administration’s apparent lack of focus on optimal economic performance. He <a href="https://www.dailywire.com/news/musk-rebukes-white-house-over-plans-to-choose-new-federal-reserve-vice-chair-with-diversity-in-mind" target="_blank" rel="noopener">responded</a> to news that the next vice chair of the Federal Reserve would be appointed with diversity factors in mind by warning that the nomination decision “affects the lives of everyone.” He added that “maximum skill with monetary policy is extremely important in this role.”
The Biden administration <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2023/02/16/executive-order-on-further-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/" target="_blank" rel="noopener">operates</a> under a “whole-of-government approach to racial equity and support for underserved communities” and recently <a href="https://www.dailywire.com/news/turned-government-funded-racism-into-an-art-biden-creates-army-of-equity-bureaucrats-across-the-federal-government-with-latest-executive-order" target="_blank" rel="noopener">mandated</a> that senior officials form “agency equity teams” to ensure federal workforces are sufficiently diverse. Musk and other critics of weighing racial and sexual minority status in hiring processes say the practice causes a decline in overall competence as efforts to merely hire the most qualified candidates are neglected.
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Diversity quotas are frequently adopted by companies that subscribe to the environmental, social, and corporate governance movement, also known as ESG, which contends that businesses have a mandate to pursue societal good apart from simply offering the goods and services which improve the lives of their customers. Musk, the world’s richest man, <a href="https://www.dailywire.com/news/elon-musk-the-s-in-esg-stands-for-satanic" target="_blank" rel="noopener">responded</a> to a social media post detailing the use of ESG criteria among financial managers at the World Economic Forum by quipping that “the S in ESG stands for Satanic.”

Elon Musk Joe Biden

‘Umm, The Banks Are Melting’: Musk Blasts Biden’s Misplaced Priorities As White House Tweets About Climate Change

Musk Notes Biden's Misplaced Priorities As White House Tweets About Climate Change

Climate Change

Elon Musk

<a href="https://www.dailywire.com/topic/treasury-department" target="_blank" rel="noopener">Treasury</a> Secretary <a href="http://dailywire.com/topic/janet-yellen?_gl=1*tcdc2g*_ga*NzUzNDA5ODIxLjE2NzkzMjkzNzM.*_ga_CZKR9ZYKJP*MTY3OTU4MTExNC4xNS4xLjE2Nzk1OTQ1NzUuNTguMC4w" target="_blank" rel="noopener">Janet Yellen</a> prompted unease among investors after she appeared to walk back comments indicating that financial authorities would guarantee large <a href="http://dailywire.com/topic/banks" target="_blank" rel="noopener">bank</a> deposits.
The recent collapse of <a href="http://dailywire.com/topic/silicon-valley-bank" target="_blank" rel="noopener">Silicon Valley Bank</a>, where the vast majority of accounts exceeded the $250,000 threshold guaranteed by the Federal Deposit Insurance Corporation, prompted the government-backed company to secure all accounts in order to prevent additional bank runs. Some investors have called for deposit insurance for all account holders across the financial system with balances above $250,000 until the crisis subsides.
Yellen vowed in <a href="https://home.treasury.gov/news/press-releases/jy1354" target="_blank" rel="noopener">remarks</a> to the American Bankers Association on Tuesday that interventions similar to the one that protected Silicon Valley Bank account holders “could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion,” a comment that market actors interpreted as an implicit guarantee of all deposits. The senior Biden administration economist <a href="https://www.youtube.com/watch?v=0_iw_Vc-T6I" target="_blank" rel="noopener">told</a> the Senate Appropriations Committee on Wednesday, however, that she has “not considered or discussed anything” related to “blanket insurance or guarantees of all deposits.”
Markets slid on Wednesday afternoon as a result of the comments; officials at the Federal Reserve also <a href="https://www.dailywire.com/news/federal-reserve-hikes-target-interest-rates-by-quarter-point-as-officials-balance-fighting-inflation-and-protecting-banks" target="_blank" rel="noopener">announced</a> an expected quarter-point target interest rate hike on Wednesday.
Pershing Square Capital Management CEO Bill Ackman had <a href="https://twitter.com/BillAckman/status/1638263984313729024" target="_blank" rel="noopener">said</a> that the earlier comments from Yellen “definitely help and hopefully mitigate the need for a temporary deposit guarantee.” He later <a href="https://twitter.com/BillAckman/status/1638659841358004225" target="_blank" rel="noopener">added</a> that the statement declaring that “systemwide deposit guarantees were not being considered” had the opposite effect.
“A temporary systemwide deposit guarantee is needed to stop the bleeding,” he contended. “The longer the uncertainty continues, the more permanent the damage is to the smaller banks, and the more difficult it will be to bring their customers back.”
Ackman noted that the rise in target interest rates to 5% renders bank deposits less attractive to savers and will prompt them to lend their money so they can benefit from the higher returns. “I would be surprised if deposit outflows don’t accelerate effective immediately,” he remarked.
Silicon Valley Bank fulfilled withdrawals by selling a long-term bond portfolio that had declined substantially in value amid Federal Reserve actions to hike interest rates. Assets in the banking system are now $2 trillion lower than their book value as a result of the rollback in monetary stimulus, which had been maintained to stimulate the economy during the lockdown-induced recession, according to a <a href="https://www.dailywire.com/news/banking-system-is-sound-and-government-will-back-deposits-at-smaller-banks-yellen-promises" target="_blank" rel="noopener">study</a> from analysts at the National Bureau of Economic Research.
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Grit Capital CEO Genevieve Roch-Decter also <a href="https://twitter.com/GRDecter/status/1638901807027044356" target="_blank" rel="noopener">noted</a> that banks increasing their exposure to the commercial real estate sector in recent years constitutes a “timebomb sitting on bank balance sheets” since projects in the industry have been harmed by remote work arrangements. “Silicon Valley Bank’s collapse was triggered by a $1.8 billion loss from its bond portfolio,” she said. “The losses from commercial real estate loans that go into default could be much, much higher.”
Confidence in the financial system has been severely impacted by the recent volatility. Only 10% of the population has a “great deal” of confidence in the individuals who lead banks, according to a <a href="https://www.dailywire.com/news/americans-faith-in-banks-plummets-amid-financial-chaos" target="_blank" rel="noopener">poll</a> from the Associated Press and the National Opinion Research Center released on Wednesday, while 30% have “hardly any” confidence and 57% have “only some” confidence. The survey, which was conducted in the days after Silicon Valley Bank collapsed, showed a decline from the 22% who had a “great deal” of confidence three years ago.

Treasury Secretary Janet Yellen Testifies In Senate Hearing On Department’s 2024 Budget Request

Yellen Walks Back Implicit Support For Large Bank Account Holders, Prompts Investor Unease

Yellen Walks Back Implicit Support For Large Bank Account Holders

Janet Yellen

Few Americans have trust in the nation’s <a href="http://dailywire.com/topic/banks" target="_blank" rel="noopener">banking</a> sector following the recent collapses of <a href="http://dailywire.com/topic/silicon-valley-bank" target="_blank" rel="noopener">Silicon Valley Bank</a> and Signature Bank.
A mere 10% of the population has a “great deal” of confidence in the individuals who lead banks, according to a <a href="https://apnorc.org/projects/few-have-confidence-in-financial-institutions/" target="_blank" rel="noopener">poll</a> from the Associated Press and the National Opinion Research Center released on Wednesday, while 30% have “hardly any” confidence and 57% have “only some” confidence. The survey, which was conducted between March 16 and March 20, found that trust in financial firms declined from the 22% who had a “great deal” of confidence three years ago.
The sudden collapse of Silicon Valley Bank, which was closed on March 10 by regulators and is now controlled by the Federal Deposit Insurance Corporation, induced a bank run as account holders with funds that surpassed the $250,000 deposit insurance threshold withdrew their balances. Signature Bank, which was closed on March 12, likewise had a large share of account holders with deposits above $250,000.
Americans also expressed a preference for more regulation on the sector: 56% of respondents believe “government regulation of financial institutions is inadequate,” with 63% of Democrats and 51% of Republicans calling for more restrictions.
The White House recently <a href="https://www.dailywire.com/news/biden-calls-for-crackdown-on-senior-bank-executives" target="_blank" rel="noopener">asked</a> lawmakers to introduce regulations that would “hold senior management accountable when their banks fail” or enter into the control of the FDIC and vowed that “the American people and American businesses can have confidence that their bank deposits will be there when they need them.” House Financial Services Committee Chairman Patrick McHenry (R-NC) <a href="https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=408652" target="_blank" rel="noopener">said</a> that he has “confidence in our financial regulators and the protections already in place to ensure the safety and soundness of our financial system.”
Another <a href="https://civicscience.com/americans-trust-in-banks-continues-to-decline-but-trust-from-major-bank-members-varies/" target="_blank" rel="noopener">survey</a> from CivicScience found that the share of Americans reporting “not very much” trust in banks soared from 34% to 39% in the days after the collapses.
Silicon Valley Bank fulfilled withdrawal requests by selling a long-term bond portfolio that had declined substantially in value amid Federal Reserve actions to hike interest rates. Assets in the overall banking system are now $2 trillion lower than their book value, according to a <a href="https://www.dailywire.com/news/banking-system-is-sound-and-government-will-back-deposits-at-smaller-banks-yellen-promises" target="_blank" rel="noopener">study</a> from analysts at the National Bureau of Economic Research.
Treasury Secretary Janet Yellen commented on Tuesday that withdrawals from regional banks have stabilized and asserted that the financial system remains sound. “The American economy relies on a healthy banking system that can provide for the credit needs of families and businesses,” she said in <a href="https://www.dailywire.com/news/banking-system-is-sound-and-government-will-back-deposits-at-smaller-banks-yellen-promises" target="_blank" rel="noopener">remarks</a> to the American Bankers Association. “Let me be clear: the government’s recent actions have demonstrated our resolute commitment to take the necessary steps to ensure that depositors’ savings and the banking system remain safe.”
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Some have expressed concern that the implosion of the two financial institutions would lead to further consolidation in the banking system. New York Community Bancorp acquired the former branches of Signature Bank on Sunday for more than $38 billion and will service the defunct firm’s clients via Flagstar Bank, according to a <a href="https://www.fdic.gov/news/press-releases/2023/pr23021.html" target="_blank" rel="noopener">statement</a> from the FDIC; the government-backed corporation also said there has been “substantial interest from multiple parties” with respect to the sale of Silicon Valley Bank.
The two largest banks in Switzerland, UBS and Credit Suisse, likewise <a href="https://www.dailywire.com/news/switzerlands-two-largest-banks-to-combine" target="_blank" rel="noopener">merged</a> this week as the former purchased the latter for more than $3 billion. Credit Suisse, formerly the eighth-largest investment bank in the world, had <a href="https://www.dailywire.com/news/collapsing-too-big-to-fail-bank-receives-massive-support-from-swiss-authorities" target="_blank" rel="noopener">struggled</a> over the past several years under lackluster risk and compliance management.

Americans’ Faith In Banks Plummets Amid Financial Chaos

Americans' Faith In Banks Plummets After Silicon Valley Bank Collapse

Former Disney star <a href="https://www.dailywire.com/topic/lindsay-lohan" target="_blank" rel="noopener">Lindsay Lohan</a> and YouTuber-turned-boxer Jake Paul are two celebrities among several others that face federal charges for illegally touting crypto asset securities from a digital currency entrepreneur.
The Securities and Exchange Commission announced <a href="https://www.sec.gov/news/press-release/2023-59">charges</a> Wednesday against crypto asset entrepreneur Justin Sun and three of his companies — Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent) — for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT).
The commission accused Sun and his companies of &#8220;orchestrating a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation,&#8221; which included Lohan, Paul, and DeAndre Cortez Way, otherwise known as American rapper Soulja Boy.
Authorities also named musicians Austin Mahone, Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo), Aliaune Thiam (Akon), and adult actress Michele Mason (Kendra Lust) in the complaint.
According to the complaint, unregistered offers and sales violate Section 5 of the Securities Act, which requires all issuers to register non-exempt securities with the Securities and Exchange Commission.
SEC Chair Gary Gensler said in a news release that such charges demonstrate the high risk investors face when crypto asset securities are offered and sold without proper disclosure.
&#8220;Sun and his companies not only targeted U.S. investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in TRX,&#8221; Gensler said. &#8220;Sun further induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.&#8221;
According to the complainant, the celebrities fraudulently manipulated the crypto market for Sun&#8217;s companies by extensive wash trading, which allegedly involved purchasing and selling securities &#8220;to make it appear actively traded without an actual change in beneficial ownership.&#8221;
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&#8220;While we&#8217;re neutral about the technologies at issue, we&#8217;re anything but neutral when it comes to investor protection,&#8221; Gurbir S. Grewal, Director of the SEC&#8217;s Division of Enforcement, said.
Grewal called Sun&#8217;s move an &#8220;age-old playbook&#8221; intended to mislead and harm investors, which offers securities without registration and disclosure compliance before manipulating the market for such securities.
&#8220;Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation,&#8221; he said. &#8220;This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.&#8221;
Aside from Soulja Boy and singer Austin Mahone, the celebrities accused of touting Sun&#8217;s crypto scheme have agreed to pay more than $400,000 in interest and penalties to settle the charges. However, the accused has neither admitted nor denied the allegations.
Andrew Brettler, a lawyer for Lohan, told <a href="https://www.reuters.com/legal/sec-sues-justin-sun-others-over-illegal-crypto-sales-2023-03-22/">Reuters</a> the actress was unaware of the disclosure requirements until last March.
&#8220;From the outset, she cooperated with the SEC&#8217;s investigation and ultimately agreed to disgorge the small amount of money she received and paid a fine to resolve this matter,&#8221; her attorney Andrew Brettler said in an emailed statement to the outlet.
Lawyers for Sun and the others named in the complaint either could not be identified, declined to comment, or did not respond immediately to requests for comment.

Celebrity Sightings In New York City – November 10, 2022

Lindsay Lohan, Jake Paul Charged For ‘Touting’ Illegal Crypto Scheme

Lindsay Lohan, Jake Paul Charged For 'Touting' Illegal Crypto Scheme

Cryptocurrency

Lindsay Lohan

Securities and Exchange Commission

<a href="http://dailywire.com/topic/economy" target="_blank" rel="noopener">Economic</a> volatility over the past year has severely impacted retirement savings, with more than half of households falling short of the savings trajectory needed to retire at their desired level.
The most recent Retirement Savings Assessment index <a href="https://preview.thenewsmarket.com/Previews/FINP/DocumentAssets/638914.pdf" target="_blank" rel="noopener">published</a> by Fidelity Investments showed that the nation’s retirement score has declined to 78 as of 2023, marking a decrease of five points from the all-time high of 83 charted in 2020. The typical household now ranks “fair” rather than “good” with respect to their preparation for retirement.
“The decline in preparedness is being driven by two primary factors: people are saving less and investing more conservatively, which are natural reactions during a challenging financial environment, from the pandemic to market volatility to the latest turmoil in the banking industry,” Fidelity Investments said in a <a href="https://newsroom.fidelity.com/pressreleases/fidelity-research--america-s-retirement-preparedness-level-declines-amid-continued-volatility/s/c57ac0e9-9c5c-4f5c-938c-cdf82a3aa7b1" target="_blank" rel="noopener">press release</a> issued on Tuesday.
Some 52% of respondents to an assessment from Fidelity Investments may need to “make modest to significant adjustments to their retirement lifestyle” unless they “take action to make up for the shortage” in their savings, while 34% of respondents require “significant adjustments.”
Members of the Baby Boomer generation, those born between 1946 and 1964, are considered the most prepared for retirement. Members of Generation X, those born between 1965 and 1980, as well as Millennials, those born between 1981 and 1996, saw declines in preparedness.
“American savers continue to navigate through uncertainty, and as a result, may consider pulling back on saving for the future,” Fidelity Investments Vice President of Retirement Rita Assaf said. “When it comes to long-term investing, staying focused on your individual goals is critical. Having a plan in place is one solid way to help weather any storm, as we’ve seen the last few years and weeks with the pandemic, inflation and market volatility.”
Over the past two years, phenomena such as supply chain bottlenecks and labor shortages have worsened overall inflationary pressures. Recent stock market tumult caused significant declines in retirement accounts: Fidelity Investments <a href="https://newsroom.fidelity.com/pressreleases/fidelity--2022-retirement-analysis--in-the-midst-of-inflation-and-uncertainty--retirement-account-ba/s/095bb4a8-cf3a-484e-a911-bc0c61c460ff" target="_blank" rel="noopener">indicated</a> that the average IRA balance was $104,000 in the fourth quarter of 2022, marking a 23% year-over-year decline from $135,600 in the fourth quarter of 2021, while the average 401(k) balance was $103,900, constituting a decline of roughly 20% year-over-year from $130,700.
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President Joe Biden has expressed economic optimism despite rising inflation rates and other obstacles to recovery from the lockdown-induced recession. Price levels increased 6% between February 2022 and February 2023, according to <a href="https://www.dailywire.com/news/biden-says-economy-will-continue-to-make-progress-after-another-dismal-inflation-report" target="_blank" rel="noopener">data</a> from the Bureau of Labor Statistics, a moderation from record levels of 9.1% observed in June 2022, even as inflation remains more than four times higher since the start of the Biden administration.
“We will continue to make progress in our fight to build an economy from the bottom up and middle out, not top down,” the commander-in-chief said. “At the same time, I will do everything in my power to prevent us from going backwards on the progress we’ve made, including by standing up to Congressional Republicans who threaten economic catastrophe over the debt limit in order to secure tax cuts for the wealthy and large corporations and reckless cuts to critical programs that American seniors and families count on.”

Savings from broken piggy bank.

American Retirement Preparedness Drops To Worrying New Level Amid Economic Turmoil

Inflation

Retirement funds

Stock Market

<a href="http://dailywire.com/topic/housing?_gl=1*1gylwoi*_ga*NzUzNDA5ODIxLjE2NzkzMjkzNzM.*_ga_CZKR9ZYKJP*MTY3OTQ5OTQ1My4xMS4xLjE2Nzk1MDYyMzMuNTMuMC4w" target="_blank" rel="noopener">Homebuyers</a> in the United States are paying the lowest down payments in nearly two years amid a decreased demand for properties.
The median down payment for a home financed by a mortgage was $42,375 as of January 2023, equivalent to 10% of the purchase price, according to a Wednesday <a href="https://www.redfin.com/news/down-payments-decline-all-cash-january-2023/" target="_blank" rel="noopener">analysis</a> from Redfin. The figure marks a decline from the 13.6% share of the purchase price recorded in January 2022 and the lockdown-era peak of 17.5% in May 2022.
“One silver lining of high mortgage rates and economic turmoil is that they’ve slowed competition,” Redfin Senior Economist Sheharyar Bokhari said in a statement. “That means buyers are often able to purchase a home without facing a bidding war and don’t need to fork over a huge portion of their savings for a down payment to grab sellers’ attention. Today’s buyers are also able to save money in other ways: Nearly half of sellers are offering concessions, like helping pay for a mortgage-rate buydown or covering closing costs, to attract buyers.”
Home prices and median down payments had soared over the past three years as competition for properties accelerated. Lockdown mandates caused low labor force participation and supply chain bottlenecks, worsening the chronic trend of decreased construction levels for residential real estate. The overall housing market witnessed a shortage of 3.8 million properties as of 2019, according to <a href="https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage" target="_blank" rel="noopener">data</a> from the government-backed mortgage company Fannie Mae, while the National Association of Realtors <a href="https://www.nar.realtor/newsroom/once-in-a-generation-response-needed-to-address-housing-supply-crisis" target="_blank" rel="noopener">estimates</a> that homebuilders should have constructed between 5.5 million and 6.8 million more houses over the past two decades to match current demand.
Down payments have fallen 35% from their recent peak but remain 30% higher than levels witnessed before the lockdown-induced recession. Other causes for the lower down payments are high shelter costs and overall inflationary pressures, which have depleted the savings buyers are able to allocate for a down payment, as well as a decline in home prices caused by the higher mortgage rates.
Down payments have decreased 33% in Sacramento, California, over the past year, as well as 28% in Atlanta, Georgia, and 23% in Orlando, Florida. The only markets which saw higher down payment percentages were Newark, New Jersey, and San Francisco, California.
Elevated mortgage rates, caused by actions from the Federal Reserve meant to combat inflation, recently <a href="https://www.dailywire.com/news/home-prices-fell-year-over-year-for-the-first-time-in-a-decade-but-theres-a-massive-catch" target="_blank" rel="noopener">produced</a> the first year-over-year decline in median home prices since February 2012 even as properties become less affordable. Median home sale prices increased from $322,600 in the second quarter of 2020 to $467,700 in the fourth quarter of 2022, according to <a href="https://fred.stlouisfed.org/series/MSPUS" target="_blank" rel="noopener">data</a> from the Department of Housing and Urban Development.
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Apartment rental markets are meanwhile seeing <a href="https://www.dailywire.com/news/americas-typical-apartment-is-getting-smaller" target="_blank" rel="noopener">decreases</a> in typical unit sizes, indicating a reversal from the desire for larger properties that corresponded with government lockdowns as families spent more time in their homes and breadwinners relied more on remote work. The average size of new apartments was 887 square feet in 2022, constituting a 3% drop since the previous year and continuing a decline of 54 square feet over the past decade, according to a recent <a href="https://www.rentcafe.com/blog/rental-market/market-snapshots/national-average-apartment-size/" target="_blank" rel="noopener">report</a> from RentCafe. Average rental prices have increased 26% from $1,568 in December 2019 to $1,981 in December 2022, according to <a href="https://www.zillow.com/research/december-2022-rental-report-31992/" target="_blank" rel="noopener">data</a> from Zillow.

Aerial photography of suburbs, NY

Average Down Payment On Houses Drops As Real Estate Demand Cools

Average Down Payments Drop As Real Estate Demand Cools

Housing

Stocks slid after officials at the <a href="http://dailywire.com/topic/federal-reserve" target="_blank" rel="noopener">Federal Reserve</a> announced a 0.25% increase in the target <a href="http://dailywire.com/topic/interest-rates" target="_blank" rel="noopener">federal funds</a> rate on Wednesday, continuing a slowdown from previous rate hikes meant to combat <a href="http://dailywire.com/topic/inflation" target="_blank" rel="noopener">inflation</a> and marking caution from policymakers given recent tumult in the <a href="http://dailywire.com/topic/banks" target="_blank" rel="noopener">banking</a> sector.
Rate hikes increase the cost of borrowing money, lowering inflationary pressures as consumers and businesses assume less debt. Federal Reserve officials previously set interest rates targets between 0.0% and 0.25% during the lockdown-induced recession to stimulate economic activity; target interest rates now sit between 4.75% and 5.0%.
“Recent indicators point to modest growth in spending and production,” members of the Federal Open Market Committee said in a <a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20230322a.htm">statement</a>. “Job gains have picked up in recent months and are running at a robust pace; the unemployment rate has remained low. Inflation remains elevated.”
The Dow slid more than 500 points on Wednesday and closed 1.6% lower than market open, with regional bank shares leading the decline.
As inflation remained elevated and rose to levels as high as 9.1% in June 2022, policymakers at the Federal Reserve <a href="https://www.dailywire.com/news/breaking-federal-reserve-hikes-target-interest-rates-half-a-percentage-point" target="_blank" rel="noopener">raised rates</a> by 0.75% on four occasions before implementing a 0.5% hike at the end of last year. Inflation rates were <a href="https://www.dailywire.com/news/biden-says-economy-will-continue-to-make-progress-after-another-dismal-inflation-report" target="_blank" rel="noopener">charted</a> at 6.0% as of February 2023.
The decision to hike interest rates announced on Wednesday was complicated by the implosion of Silicon Valley Bank and Signature Bank earlier this month, as well as broader international volatility in the financial sector. Silicon Valley Bank had been forced to sell a long-term bond portfolio at a loss because of the higher interest rate environment as account holders whose balances exceeded the $250,000 threshold insured by the Federal Deposit Insurance Corporation rushed to withdraw their funds; the government-backed company nevertheless insured all accounts to discourage bank runs at other firms.
Federal Open Market Committee members added in the statement that they believe the financial system is resilient. “Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation,” the body added. “The extent of these effects is uncertain.”
One recent <a href="https://www.dailywire.com/news/nearly-200-other-banks-vulnerable-to-svb-style-collapse-study-says" target="_blank" rel="noopener">study</a> from National Bureau of Economic Research analysts revealed that more restrictive monetary policy from the Federal Reserve has caused the value of bank assets to decrease by 10%, indicating that the overall financial system’s assets are $2 trillion lower than their book value. The “substantial losses in the value of banks’ long-duration assets” indicate that “banks are much more fragile” to runs from uninsured depositors.
Federal Reserve Chair Jerome Powell had said days before the turmoil in the financial sector that robust labor market data and persistent inflation in some product categories meant that policymakers would continue to <a href="https://www.dailywire.com/news/federal-reserve-chair-jerome-powell-tells-congress-more-rate-hikes-are-on-the-way" target="_blank" rel="noopener">increase</a> target interest rates. Despite the low unemployment rates, household wages have declined over the past two years when adjusted for inflation.
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“We continue to anticipate that ongoing increases in the target range for the federal funds rate will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive,” he said in remarks before members of the Senate Banking Committee. “We are seeing the effects of our policy actions on demand in the most interest-sensitive sectors of the economy. It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation.”

Jerome Powell Testifies On Federal Reserve’s Response To Coronavirus Pandemic

Stocks Slide After Federal Reserve Hikes Target Interest Rate, Balances Fighting Inflation And Protecting Banks

Federal Reserve Hikes Target Interest Rates By Quarter Point

Interest Rates

<a href="https://www.dailywire.com/topic/republican-party" target="_blank" rel="noopener">Republican</a> state attorneys general rebuked senior <a href="http://dailywire.com/topic/banks" target="_blank" rel="noopener">financial</a> authorities on Tuesday over the role that left-wing regulatory priorities allegedly played in the recent collapse of <a href="http://dailywire.com/topic/silicon-valley-bank" target="_blank" rel="noopener">Silicon Valley Bank</a>.
The financial institution imploded earlier this month as depositors <a href="https://www.dailywire.com/news/regulators-shut-down-major-tech-bank-after-run-on-savings" target="_blank" rel="noopener">rushed</a> to withdraw their funds and the company suffered heavy losses from the liquidation of a long-term bond portfolio. The Federal Deposit Insurance Corporation now directs holdings maintained by Silicon Valley Bank, which California state regulators closed on March 10, as well as Signature Bank in New York, which was closed on March 12.
Sixteen state attorneys general contended in a letter addressed to Federal Reserve Chair Jerome Powell, Treasury Secretary Janet Yellen, and other senior officials that recent emphasis on purported climate-related financial risks from regulators distracted from the focus on risk management that Silicon Valley Bank and other companies should have maintained.
“To put it bluntly, the administration’s zealotry in fighting climate change by unwisely and illegally attempting to convert federal financial regulators into environmental activists is inextricably intertwined with these bank failures and the fallout from them,” said the letter, which was provided to The Daily Wire. “Your warping of the financial regulatory system undermines both the safe and sound operation of financial institutions and the public’s faith in the fairness and efficacy of the regulatory regime.”
The Federal Reserve has recently introduced programs meant to evaluate perceived climate-related financial risks. Policymakers <a href="https://www.dailywire.com/news/federal-reserve-will-evaluate-climate-related-financial-risks-with-help-from-bidens-new-climate-officer" target="_blank" rel="noopener">unveiled</a> an initiative with six of the nation’s largest banks last year to examine various risk scenarios posed by rising worldwide temperatures, although officials said no “capital consequences” would emerge from the exercise.
Policymakers also <a href="https://www.dailywire.com/news/bidens-treasury-advisory-committee-on-racial-equity-to-be-led-by-defund-the-police-advocate-former-philadelphia-mayor" target="_blank" rel="noopener">announced</a> an initiative with the Treasury Department meant to consider the private sector’s approach to climate risk. President Joe Biden signed an <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/05/20/executive-order-on-climate-related-financial-risk/" target="_blank" rel="noopener">executive order</a> at the beginning of his tenure asking all agencies to examine the apparent problem.
“Your forays into environmental regulation undermine faith in financial regulation as a general matter, as they create the perception that the regulatory apparatus is more concerned with political issues than ensuring the integrity of the financial system,” the attorneys general continued. “You should publicly direct banks to pursue profitability, liquidity, and prudent risk management, and note that declining to serve customers for failing to comply with unrealistic climate initiatives like achieving net zero by 2050 is a threat to the financial system.”
Among the signatories of the document were Texas Attorney General Ken Paxton, Ohio Attorney General Dave Yost, and Kentucky Attorney General Daniel Cameron. Utah Attorney General Sean Reyes said in a statement provided to The Daily Wire that the failure of Silicon Valley Bank is a “warning sign that the administration’s environmental activism in its financial regulation not only ignores real financial risk but increases it.”
Republican state officials have condemned asset management companies and the Biden administration in recent months for advancing the environmental, social, and corporate governance movement, also known as ESG. Skeptics of the investment approach note that companies devoted to the movement advance specific left-wing political and social causes, such as decreasing carbon emissions or diversifying company leadership with respect to race or sex, in a manner that compromises or distracts from profitability.
Silicon Valley Bank indeed faced <a href="https://www.dailywire.com/news/failed-svb-criticized-for-hyper-focus-on-woke-dei-initiatives-lgbt-activism" target="_blank" rel="noopener">backlash</a> in the wake of its collapse for an apparent emphasis on diversity, equity, and inclusion. The firm neglected to fill its senior risk management role for most of last year while the executive in charge of risk management in Europe, Africa, and the Middle East described herself as a “queer person of color from a working-class background” and organized LGBTQ initiatives such as a month-long pride campaign.

US-POLITICS-BANKING-BIDEN-POWELL

Woke Regulations Led To Silicon Valley Bank Collapse, Republicans Argue In Letter To Regulators

Republicans Pin Silicon Valley Bank Collapse On Regulatory Wokeness

The size of the typical <a href="http://dailywire.com/topic/housing" target="_blank" rel="noopener">apartment</a> in the United States saw one of the largest declines in recent years as inventory remains constrained.
The average size of new apartments was 887 square feet in 2022, constituting a 3% drop since the previous year and a decline of 54 square feet over the past decade, according to a recent <a href="https://www.rentcafe.com/blog/rental-market/market-snapshots/national-average-apartment-size/" target="_blank" rel="noopener">report</a> from RentCafe. The apartment search company noted that higher demand for housing prompted the lower unit sizes.
“With one of the highest levels of construction in half a century, the year was marked by the need for more housing all across the country,” the report said. “As such, more studios and one-bedroom apartments were finished in 2022 than ever before.”
The years marked by the lockdown-induced recession witnessed a modest increase in the size of new apartments from 910 square feet in 2019 to 917 square feet in 2021. Demand in real estate markets pivoted toward a desire for larger properties as families spent more time in their homes and breadwinners relied more on remote work. Developers offered a “quick response to the need for more space” and adjusted floor plans to “accommodate large enough configurations to fit a home office.”
Silver Spring, Maryland, has seen a 15% decline in average square footage over the past decade, surpassing all other metropolitan areas. Portland, Oregon, saw a decline of 9%, while the New York City boroughs of Queens and Brooklyn each witnessed 7% declines.
Other metropolitan areas, on the other hand, are witnessing trends toward larger apartment sizes: Tucson, Arizona, and Tallahassee, Florida, saw 29% and 16% respective increases in average square footage. Cities such as Mobile, Alabama, and Lubbock, Texas, followed suit with 17% increases in apartment size over the past decade.
Volatility in the real estate market occurs as supply chain bottlenecks and labor shortages persist beyond the lockdown-induced recession, worsening overall inflationary pressures in the global economy. Average rental prices have increased 26% from $1,568 in December 2019 to $1,981 in December 2022, according to <a href="https://www.zillow.com/research/december-2022-rental-report-31992/" target="_blank" rel="noopener">data</a> from Zillow.
The overall housing market witnessed a shortage of 3.8 million properties as of 2019, according to <a href="https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage" target="_blank" rel="noopener">data</a> from the government-backed mortgage company Fannie Mae. The National Association of Realtors <a href="https://www.nar.realtor/newsroom/once-in-a-generation-response-needed-to-address-housing-supply-crisis" target="_blank" rel="noopener">estimates</a> that homebuilders should have constructed between 5.5 million and 6.8 million more houses over the past two decades to match current demand.
Increasing mortgage rates recently <a href="https://www.dailywire.com/news/home-prices-fell-year-over-year-for-the-first-time-in-a-decade-but-theres-a-massive-catch" target="_blank" rel="noopener">produced</a> the first year-over-year decline in median home prices since February 2012, even as properties become less affordable due to the high interest rates. Median home sale prices had increased from $322,600 in the second quarter of 2020 to $467,700 in the fourth quarter of 2022, according to <a href="https://fred.stlouisfed.org/series/MSPUS" target="_blank" rel="noopener">data</a> from the Department of Housing and Urban Development. Costs plateaued in the second half of last year as mortgage rates soared.
Actions from the Federal Reserve to decrease the target federal funds rate to stimulate the economy during the recession had produced historically low mortgage rates. Homeowners who acquired mortgages at favorable rates have reason to avoid selling their properties given current market conditions, a phenomenon that could further limit the number of houses available for purchase and decrease affordability for buyers.

Living room

America’s Typical Apartment Is Getting Smaller

Apartments In America Are Getting Smaller

<a href="https://www.dailywire.com/topic/treasury-department" target="_blank" rel="noopener">Treasury</a> Secretary <a href="http://dailywire.com/topic/janet-yellen?_gl=1*3y8f6k*_ga*NzUzNDA5ODIxLjE2NzkzMjkzNzM.*_ga_CZKR9ZYKJP*MTY3OTQwNjAxOS42LjEuMTY3OTQxMTc2Ni41Ny4wLjA." target="_blank" rel="noopener">Janet Yellen</a> commented on Tuesday that deposit withdrawals from regional <a href="http://dailywire.com/topic/banks" target="_blank" rel="noopener">banks</a> have stabilized and affirmed that authorities will protect smaller financial institutions.
The recent collapse of <a href="http://dailywire.com/topic/silicon-valley-bank" target="_blank" rel="noopener">Silicon Valley Bank</a>, where the vast majority of accounts exceeded the $250,000 threshold guaranteed by the Federal Deposit Insurance Corporation, prompted the government-backed company to secure all accounts at the firm to prevent more bank runs. Yellen said in <a href="https://home.treasury.gov/news/press-releases/jy1354" target="_blank" rel="noopener">remarks</a> at a summit of the American Bankers Association that the Biden administration and the Federal Reserve successfully mitigated fallout in the financial sector.
“As everyone in this room knows, the American economy relies on a healthy banking system that can provide for the credit needs of families and businesses,” Yellen said. “Let me be clear: the government’s recent actions have demonstrated our resolute commitment to take the necessary steps to ensure that depositors’ savings and the banking system remain safe.”
Silicon Valley Bank provided services to half of venture-backed technology and health care firms in the United States. The current deposit insurance threshold of $250,000 is suitable for most individuals and households, yet businesses such as those served by Silicon Valley Bank often retain larger sums to conduct operations and pay employees.
Yellen added that “the situation is stabilizing” and characterized the banking system as “sound.” She noted that regulators are examining the causes of the failures at Silicon Valley Bank, which covered withdrawal requests by selling a bond portfolio that had declined substantially in value amid Federal Reserve actions to hike interest rates.
One recent <a href="https://www.dailywire.com/news/nearly-200-other-banks-vulnerable-to-svb-style-collapse-study-says" target="_blank" rel="noopener">study</a> from analysts associated with the National Bureau of Economic Research revealed that monetary tightening from the Federal Reserve has caused bank asset values to decrease by 10%, indicating that the overall financial system’s assets are $2 trillion lower than their book value. The “substantial losses in the value of banks’ long-duration assets” indicate that “banks are much more fragile” to runs by uninsured depositors.
Approximately 1,619 of the 4,800 financial institutions evaluated by the researchers would not be able to withstand all uninsured account holders demanding their funds, while 186 banks would not be unable to withstand half of uninsured depositors demanding their funds. Both scenarios assume that the banks would not be forced to sell their long-term assets at fire sale prices to cover withdrawals.
Sen. James Lankford (R-OK) <a href="https://www.dailywire.com/news/janet-yellen-admits-community-banks-in-middle-america-might-not-be-protected-like-silicon-valley-bank" target="_blank" rel="noopener">questioned</a> Yellen last week about whether uninsured deposits at community banks in his state “regardless of their size” would likewise be “fully insured.” She initially responded that authorities would collectively decide whether failure of the institutions would “create systemic risk and significant financial and economic consequences” but vowed at the American Bankers Association that smaller banks would receive protection.
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“Given recent developments, I think it is important to reaffirm a broader point: our dynamic and diverse banking system is critical to the American economy,” she commented. “Large banks play an important role in our economy, but so do small and mid-sized banks. These banks are heavily engaged in traditional banking services that provide vital credit and financial support to families and small businesses. They also increase competition in the banking sector, and often have specialized knowledge and expertise in the communities they invest in.”

Treasury Secretary Yellen Speaks At The American Bankers Association’s Washington Summit

Banking System Is ‘Sound’ And Government Will Back Deposits At Smaller Banks, Yellen Promises

‘The Situation Is Stabilizing’: Yellen Says Banking System Is ‘Sound’ And Government Will Back Deposits At Smaller Banks

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