US Treasury Secretary Janet Yellen has said that banks across the America are worried about contagion and have been shoring up liquidity to protect themselves from runs after the failures of Silicon Valley Bank and Signature Bank. Over the past two weeks, many mid-sized banks expressed “great concern” to the Treasury about their uninsured deposits, Yellen told a Senate Appropriations subcommittee. TRENDING STORIES See All Premium Gold price jumps as US dollar hits 7-week low after US .
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. . “Many of these banks felt very skittish about their potential to suffer runs as well,” Yellen said.
“We can see that banks across the country are shoring up their liquidity, they are very worried about contagion from the troubles of Silicon Valley Bank and Signature Bank. And the steps we took were designed to improve the confidence of all depositors that they’re safe in banks. ” She said regulators aren’t looking to provide “blanket” deposit insurance to stabilise the US banking system without working with lawmakers, and that the heads of recently failed American lender should be held accountable.
“I have not considered or discussed anything having to do with blanket insurance or guarantees of deposits,” Yellen said Wednesday during a hearing before a Senate subcommittee, answering a question about whether the protections for all US deposits would require congressional approval. She didn’t clarify if that refers to a temporary or permanent change in the cap. Yellen, along with Federal Reserve Chair Jerome Powell, has been at the center of US government efforts to restore stability to the US banking sector after the collapse of mid-sized banks.
Yellen’s testimony Wednesday comes shortly after the Fed’s rate-hike decision, with the central bank saying in a release that US banking system is “sound and resilient”. US Fed raised interest rates by 25 bps to 4. 9%, effective March 23, 2023.
Yellen also said in the hearing that executives responsible for the collapse of a bank shouldn’t be profiting when stockholders and investors take losses. MORE FROM THIS SECTION See All Premium Premium Vijay Mallya bought properties worth ₹330 crore in Eng . .
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. Premium Premium Grammarly announces Rahul Roy Chowdhury as its new CEO “This is an important form of accountability and we would be glad to work with you on that legislation,” Yellen said. “It’s important to be clear: Shareholders and debtholders of the failed banks are not being protected by the government,” she had said earlier in her opening remarks.
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