US and European authorities moved to ease fears over the health of the banking system following the failure of Silicon Valley Bank, as US regulators took over a second troubled lender.
US federal authorities stepped in to ensure depositors still had access to their funds at SVB and promised other institutions help in meeting customers' needs, but markets remained on edge Monday following the bank's sudden collapse.
In a joint statement on Sunday, the Federal Reserve, the Federal Deposit Insurance Corporation and the Treasury Department said SVB depositors would have access to "all of their money" starting Monday and that American taxpayers will not have to foot the bill. "The US banking system remains resilient and on a solid foundation," due in large part to reforms and banking industry safeguards undertaken after the financial crisis of 2008, they added.
"This ensures customer deposits are protected and can bank as normal, with no taxpayer support," said British finance minister Jeremy Hunt, who had warned a day earlier that SVB's collapse posed a serious risk to the UK's tech sector. "The contagion risk remains for small banks with highly rate-sensitive clients but the US authorities now step in to avoid contagion," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
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