US Treasury Secretary Janet Yellen rules out a government bailout for the collapsed Silicon Valley Bank.
, which was appointed receiver, was trying to find another bank willing to merge with SVB, people familiar with the matter said on Friday.“We want to make sure that the troubles that exist at one bank don’t create contagion to others that are sound,” Yellen told the CBS News“Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out…and the reforms that have been put in place means we are not going to do that again,” she said.
The Fed and the FDIC were weighing the creation of a fund that would allow regulators to backstop more deposits at banks that run into trouble, Bloomberg reported. “The good news is it is unlikely an SVB-style bankruptcy will extend to the large banks,” risk and financial advisory firm Kroll said in a research note.
Billionaire hedge fund manager Bill Ackman said in a tweet on Saturday, March 11, that failure to protect all depositors could lead to the withdrawal of uninsured deposits from other institutions. The S&P 500 regional banks index dropped 4.3% on Friday to end the week down 18%, its worst week since 2009.
Some banks could look to preemptively raise capital to fortify their balance sheets or try to strike deals of their own, industry executives said.
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