(TotalConservative.com) – Secretary Treasury Janet Yellen is attempting to project calm after a series of banking failures lead to regional destabilization last week. She delivered remarks to the American Bankers Association on Tuesday, March 21st where she said “the situation is stabilizing,” and that the American banking system is safe from further collapse.
Yellen is doing the job of attempting to quell nerves after a series of troubling banking failures hit major U.S. banks last week. The California-based Silicon Valley Bank (SVB) collapsed on March 10th when depositors tried to withdraw their funds after news of the bank’s troubles began to circulate.
After multiple emergency meetings over the weekend, officials found that another New York bank, Signature Bank, was also in the process of failure. In an attempt to stop the panic from spreading, they planned to make all depositors whole using an insurance fund between banks. This move even protected accounts that held more than the maximum FDIC-insured amount of $250,000.
The San Francisco-based First Republic Bank was also teetering on the edge of collapse last week, they were saved by an injection of $30 billion raised by major banks in a matter of days. The government is now playing catch up, with the Securities and Exchange Commission (SEC) and Department of Justice (DOJ) doing parallel investigations in the collapse to find out what the causes were.
President Joe Biden has called for Congress to tighten up the laws on banking and to increase penalties for executives whose banks fail.
Yellen pointed out that more financial magic might be on the way to save smaller institutions if they start to waver. The goal for officials is to prevent a run on the banks, which they describe as a contagion. Last week, Yellen testified to the Senate Finance Committee and delivered positive reinforcement for the banking system, claiming it “remains sound.”
Yellen will testify to two additional congressional panels to attempt to quell concerns and explain the problem in greater detail to lawmakers.
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