Emergency measures were taken by U.S. officials on Sunday to support the banking system following the collapse of the Silicon Valley Bank (SVB) and an associated bank in New York. The government has ensured that all depositors with SVB will have access to their funds from Monday, with regulators also closing the New York-based bank. President Joe Biden has pledged to hold those responsible accountable for the situation. SVB was closed on Friday after regulators seized assets, marking the largest bank failure in the U.S. since the 2008 financial crisis. However, the government has confirmed that taxpayers will not suffer any losses as a result of these measures.
The SVB had specialized in lending to technology firms, with many depositors being start-ups in the sector. The collapse has caused significant concern in Silicon Valley, with some questioning why the government has had to intervene. Canadian authorities have also taken temporary control of the bank’s assets in the country.
U.S. regulators have pledged to provide banks with access to emergency funds to restore confidence, while the Federal Reserve has announced a new term funding program to facilitate borrowing during crises. The SVB collapse has raised concerns of contagion, with fears that it could spread to other banks. HSBC has acquired SVB’s UK division, while the Treasury Department has confirmed that the deal was negotiated without the use of taxpayer funds.