Governments in the U.S. and Britain are taking extraordinary steps to prevent a potential banking crisis after the failure of California-based Silicon Valley Bank prompted fears of a broader upheaval.
Mar 13, 2023 at 7:27 amA sign of a branch of the Silicon Valley Bank is pictured at an office building where the bank is located in Frankfurt, Germany, March 13, 2023.
Regulators in the U.S. rushed to close Silicon Valley Bank on Friday when it experienced a traditional bank run, where depositors rushed to withdraw their funds all at once. It is the second-largest bank failure in U.S. history, behind only the 2008 failure of Washington Mutual. In an effort to shore up confidence in the banking system, the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. said Sunday that all Silicon Valley Bank clients would be protected and able to access their money.
Jeremy Hunt, the U.K. government’s Treasury chief, said that some of the country’s leading tech companies could have been “wiped out.” Though Sunday’s steps marked the most extensive government intervention in the banking system since the 2008 financial crisis, the actions are relatively limited compared with what was done 15 years ago. The two failed banks themselves have not been rescued, and taxpayer money has not been provided to them.
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