In a rare show of consensus, congressional lawmakers from both parties said Sunday they would oppose any possible bailout for Silicon Valley Bank, which collapsed on Friday in the biggest bank failure since the 2008 financial crisis.
Treasury Secretary Janet Yellen ruled out a bailout for the bank’s owners and investors, and members of Congress on both sides of the aisle talked about saying it would not be the right move to deal with the nation’s second-largest bank collapse. history.
“Let me be clear that during the financial crisis there were investors and owners of systemically large banks that were bailed out … and the reforms that have been put in place mean that we’re not going to do that again,” Yellen said in an interview with CBS’s “Face The Nation”.
Regulators closed the bank on Friday over concerns about its solvency as customers withdrew their money. Federal officials are reportedly looking for ways to protect uninsured bank deposits in an effort to avoid panic in the hours before the first markets open in Asia, The Washington Post reported.
Democratic Sen. Bob Menendez (NJ) said on NBC’s “Meet the Press” that he is “not ready” to offer Silicon Valley Bank a bailout “by any stretch of the imagination.”
“We need to look at exactly everything that’s relevant to that specific set of circumstances and to see what else is out there — if anything else is out there — that we should be thinking about,” Menendez said.
The Republican Rep. Nancy Mace (SC) emphasized on CNN’s “State of the Union” that she would not support a bailout “at this time.”
“You know, we can’t keep bailing out private companies because there are no consequences for their actions. People, when they make mistakes or break the law, have to be held accountable in this country,” Mace said.
“It’s still very early. I don’t think it’s even been 48 hours. But at this point, I wouldn’t support a bailout,” the congresswoman said.
Former Speaker Nancy Pelosi (D-Calif.) reportedly said at a SXSW panel that she doesn’t think “there’s any appetite in this country to bail out a bank” and that she’s instead hoping for another bank to buy it.
The Wall Street Journal reported on Sunday that regulators were auctioning off the bank in an attempt to repay depositors.
Speaker Kevin McCarthy (R-Calif.) said on Fox News’ “Sunday Morning Futures” that he believes a major bank buying Silicon Valley Bank is a “big potential” and something the administration was considering.
“Silicon Valley Bank has a lot of assets. It’s just where the capital is at the moment. So it’s attractive for someone to want to buy it. It’s just a timeline of where to go next. And management has tools to deal with this,” McCarthy said.
Hairy reportedly said that there are several potential buyers, but did not identify them – and that she hopes to see a purchase tomorrow morning. McCarthy said he hopes the administration will make an announcement on the matter tomorrow before U.S. markets open.
“I have spoken with the administration from (Federal Reserve Chair) Jay Powell and Janet Yellen. They have the tools to deal with the current situation. They know the gravity of this and they are working to try to make an announcement before the markets opens,” the chairman said of the administration. “And I hope something can be announced today to move forward.”
The Hill has reached out to the White House for comment.
Rep. Michael McCaul (R-Texas), whose home state hosts the tech-heavy South by Southwest festival, said on CBS’ “Face the Nation” that he hopes the bank’s failure was “an isolated event.”
“We want to make sure that this is an isolated event and not a systemic event that could affect things like in 2008 when we bailed out the financial sector,” he said.
Late. Mark Warner (D-Va.), meanwhile, said he was waiting to see what decisions, if any, were made Sunday before making up his mind.
“There’s been a general feeling that the people responsible, the shareholders of the bank should lose their money,” Warner said on ABC’s “This Week.” “Depositors have been another circumstance, but there are questions around moral hazard. I strongly believe that the overall system is quite strong.”
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