Washington: The Biden administration has announced steps to strengthen public confidence in the US banking system and protect the economy. As part of these measures, depositors of the Silicon Valley Bank (SVB) will have access to their money starting Monday, according to an official statement issued jointly by the Department of the Treasury, Federal Reserve, and FDIC. The resolution of the SVB by the FDIC has been approved by Treasury Secretary Janet Yellen, with the Federal Reserve and FDIC boards making recommendations after consultation with the president. The bank will be resolved in a manner that fully protects all depositors, and no taxpayer losses will be incurred.

The joint statement also announced that all depositors of the Signature Bank in New York will be made whole. The bank was closed by its state chartering authority, and the senior management has been removed. However, shareholders and certain unsecured debt holders will not be protected, and any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks.

The Federal Reserve Board has also announced that it will make additional funding available to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors. The interagency federal statement noted that the US banking system remains resilient and on a solid foundation due to reforms made after the financial crisis that ensured better safeguards for the banking industry.

California-based Silicon Valley Bank is the 16th largest bank in the US and was closed by the California Department of Financial Protection and Innovation, which later appointed the FDIC as its receiver. The Federal Reserve Board, FDIC chairman Martin Gruenberg, and Federal Reserve Board chair Jerome Powell emphasized in a joint statement that the necessary steps will be taken to ensure that depositors’ savings remain safe, and the banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.