BREAKING NEWS: Treasury Says SVB Customers Will Be Able to Access Their Deposits

Treasury Secretary Janet Yellen on Sunday afternoon announced that depositors of Silicon Valley Bank (SVB), which was taken into FDIC receivership on Friday, will have full access to their deposits beginning Monday, March 13. “No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,” according to a joint statement from the Treasury Department, the FDIC and the Federal Reserve. 

Treasury has approved plans to unwind SVB, as well as Signature Bank in New York, “in a manner that fully protects all depositors,” according to the statement. Earlier on Sunday, Yellen had ruled out a bailout of SVB, according to published reports, and the statement said that shareholders and certain unsecured debtholders of SVB would not be protected.

Separately, the Fed said it would create a new Bank Term Funding Program (BTFP), offering loans for up to a year to banks, savings associations, credit unions and other eligible depository institutions pledging U.S. Treasuries, agency debt and MBS, and other qualifying assets as collateral. These assets will be valued at par.  

“The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress,” according to the Fed. “This action will bolster the capacity of the banking system to safeguard deposits and ensure the ongoing provision of money and credit to the economy.”

Treasury will make available up to $25 billion from the Exchange Stabilization Fund as a backstop for the BTFP. However, the Fed doesn’t think it will be necessary to draw on these backstop funds. 

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