After U.S. regulators intervened in two banking entities, authorities assured all customers that their funds would be recovered, even though the institutions were officially declared bankrupt.
In a statement signed by US Department of the Treasury (DOT) Secretary Yanet Yellen, the regulator decided to “protect” the funds of depositors at Silicon Valley Bank and Signature Bank. Yesterday, the Secretary himself announced that neither the Department of Transportation nor the Federal Reserve would step in to save Silicon Valley Bank. Even so, the Biden administration intervened to try to calm markets amid talk of a possible bank run.
As explained in the statement, depositors will be able to access their funds starting this Monday, March 13. This Sunday, CriptoNoticias has announced that Circle, the developer of USD Coin (UDSC) affected by the closure of Silicon Valley Bank, is waiting for a resolution from regulators to obtain more than $3.5 billion in USDC reserves frozen by the bank.
The DOT guarantees by a statement that no payments will be made to depositors of these banking institutions through national currency (taxes) or the currency of the Federal Reserve. Payments will be offset against assets from insurance entities and hedge funds.
The statement also said that while they will maintain their payment commitments with depositors, shareholders and creditors of these entities will not be protected and their investments will not be repaid.
According to the statement, these measures are to “guarantee the safety of depositors’ savings.” However, the risk of bank runs continues, so the number of financial entities intervening may increase. If this continues, insurers may see their underwriting funding reduced, which will eventually affect bank depository institutions, who will lose access to funds.
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0X simplified Chinese version:U.S. assurances will protect funds from failed banks