Before the Asian stock market opened, the U.S. Department of the Treasury, the Federal Reserve (Fed), and the Federal Deposit Insurance Corporation (FDIC) issued a joint statement on Sunday (12th), announcing action against the collapse of Silicon Valley Bank. Deposits, US stock futures rose sharply.
The Fed announced late Sunday that it would provide additional funding to eligible thrifts to support U.S. businesses and households, ensuring banks have the capacity to meet all depositor needs. The Fed added that the move would strengthen the banking system’s ability to protect deposits and ensure the continued supply of money and credit.
The Fed also said it was establishing a new Bank Term Funding Program (BTFP) with the goal of protecting deposits. The facility will provide loans for up to a year to banks, credit unions, credit unions and more. Those who use this mechanism will be required to pledge high-quality collateral, such as government bonds, agency bonds, and mortgage-backed securities (MBS).
In addition, with the approval of the Minister of Finance, the Ministry of Finance will allocate USD 25 billion from the Exchange Stabilization Fund as support for BTFP. However, the Fed believes that these guarantee funds should not be used.
“Today we are taking decisive action to protect the American economy by strengthening public confidence in our banking system,” Fed Chairman Powell, Treasury Secretary Yellen and FDIC Chairman Martin Gruenberg said in a joint statement.
It is worth noting that Yellen said on the same day that the government will not bail out Silicon Valley Bank. She said that during the financial crisis, although some large U.S. systemic banks were bailed out by the government, the reforms promoted by the government after that mean that the U.S. government “will not do this again” and will “focus on meeting the needs of depositors.”
Around 8 a.m. on Monday, Taipei time, US stocksS&P 500 IndexFutures jumped 1.3% on the news.Nasdaq The 100 futures index rose 1.4 percent.
Meanwhile, New York state regulators shut down and took over Signature Bank on Sunday, but all depositors will be able to get all their deposits back on Monday, and taxpayers will not bear any losses. Shareholders and certain unsecured bondholders would not be protected, and top managers would be removed.
Signature Bank is the largestcryptocurrencyBanks, as of the end of last year, had total assets of $110.4 billion and total deposits of $88.6 billion.