Treasury Secretary Janet Yellen said Sunday that the United States would not consider a bailout of Silicon Valley Bank after its historic failure last week, saying in the wake of the 2008 banking crisis that “we’re not going to do that again.”
“Well, let me be clear that during the financial crisis there were investors and owners of systemic large banks that were bailed out,” Yellen said in an interview with CBS’ “Face The Nation.” “The reforms that have been put in place mean that we will not do it again. But we are concerned about depositors and are focused on trying to meet their needs.”
The bank’s collapse sent shockwaves throughout the tech industry last week, which was heavily dependent on the bank’s funding. Federal regulators seized the bank as depositors rushed to withdraw cash from the company, sparking fears that there could be widespread damage to the banking system.
The US government faced criticism after the 2008 bank bailouts, with many believing the government rewarded wealthy bank executives and shareholders for irresponsible banking and investment practices that helped sink the US economy at the time.
But while Yellen said the government was monitoring certain parts of the sector for spillovers, she reiterated that she believes the state of the US banking system is strong and that depositors should feel safe putting their money in banks.
“America’s economy depends on a safe and sound banking system,” Yellen said. “Americans need to feel confident that the banking system is safe and sound.”
With many pointing to a potential purchase of Silicon Valley Bank by an outside entity as the best possible solution, Yellen said it was up to federal regulators on how to proceed with the firm. She said she was sure officials were considering a wide range of options, including acquisitions.
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