Silicon Valley Bank failed on March 10 after depositors hurried to withdraw cash amid anxiety over the bank’s health and the federal government said the bank’s customers would get their money back.
Silicon Valley Bank Failed After Taxpayer Money Depositors Hurried To Withdraw Money – Here’s What Federal Government Say! (PHOTO: USA Today)
Silicon Valley Bank Failed
Silicon Valley Bank failed on March 10 and it was the second biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008. Moreover, the federal government announced all of the bank’s customers would get their money back, days after Silicon Valley Bank was shut down by regulators. The heads of the US Treasury Department, Federal Reserve Board, and the Federal Deposit Insurance Corporation (FDIC) on March 12 made it precise in a joint press release that taxpayers would not handle the burden of covering Silicon Valley Bank deposits.
The Federal Reserve announced it will safeguard all money for account holders, regardless of their balance, using funds from the Deposit Insurance Fund. This is a program that is funded by fees paid by banks and interest accumulated on government bonds, not funds from taxpayers. The Federal agencies said that the depositor will have access to all of their money starting Monday, March 13. The taxpayers will not suffer any losses because Silicon Valley Bank was dissolved.
The FDIC provides insurance to banks. The standard deposit is insured worth up to $250,000 per depositor but the Silicon Valley Bank catered to start-ups and small businesses, many of which had millions of bucks in their accounts well above the FDIC insurance limit of $250,000.
Money Would Not Cover To Silicon Valley Banks
President Joe Biden, US Rep. Jeff Jackson (D-N.C.), and U.S. Rep. Andy Barr (R-Ky) have all stated that taxpayer money would not be utilized to cover Silicon Valley Banks’ deposits. Instead, they explained that the deposits were being paid for using budgets from the Deposit Insurance Fund.
“No losses will be made and I want this to be an important point no losses will be borne by the taxpayers. Instead, the funds will come from the payments that banks pay into the Deposit Insurance Fund,” Biden Said
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