US Treasury Secretary Janet Yellen announced that measures will be taken to protect deposits in other banks if the money withdrawal infection increases.
However, she said, "There is a state of stability in the banking sector after the recent crisis, and withdrawals from regional US banks are stable."
And the US Treasury Secretary pointed out that the measures to protect the “Silicon Valley” and “Signature” banks were aimed at protecting the banking system, not the banks.
Yellen's remarks came after Republican hawks in the US House of Representatives vowed to oppose any blanket federal guarantee for bank deposits over the current $250,000 limit; This creates a major hurdle for a key tool for regulators to use in the event that customers run out of banks to withdraw their money again as confidence in the banking sector declines.
For its part, the “Freedom Bloc” of the House Republicans stated in a statement that the Federal Reserve “must dismantle” the exceptional financing mechanism that it established on March 12, which allows banks to increase borrowing from it to cover outflows of deposits.
"Any blanket guarantee on all bank deposits sets a dangerous precedent that simply encourages irresponsible behavior in the future to be paid for by those who adhere to the rules," the group added.
Bankers and commercial banking groups had requested comprehensive guarantees from the Federal Deposit Insurance Corporation to face the crisis that erupted this month, due to the collapse of Silicon Valley Bank.
The alliance of medium-sized American banks stated, in a letter to US Treasury Secretary Janet Yellen and the main regulators, that it should extend the Federal Insurance Corporation’s coverage of all deposits for a period of two years “to restore confidence among depositors before the fall of another bank,” in a repeat of a similar step that was previously taken during the financial crisis. that erupted in 2008.
Okaz (New York) @okaz_online