The joint statement ensured that all customer deposits at their respective banks would be honored by the federal government.
The US Treasury Department, Federal Reserve Board and Federal Deposit Insurance Corporation (FDIC) announced Sunday they would take “decisive action” to strengthen public confidence in the US banking system. The decision comes after the FDIC and Federal Reserve recommended placing Silicon Valley banks and signatory banks on the systemic risk exception. The move will allow the FDIC to settle Santa Clara, Calif.-based Silicon Valley Bank in a way that “fully protects” depositor funds and guarantees access to credit. The same is true for the New York, NY-based undersigned bank, which was closed today by a state licensing agency.
in the Joint statement, Treasury Secretary Janet L. Yellen, Federal Reserve Chairman Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg said: Giving credit to households and businesses in a way that fosters strong and sustainable economic growth. “
Senior management at both banks will be removed, and shareholders and certain unsecured creditors will be unprotected. However, depositors will have access to all their funds from his March 13th, and taxpayers will not bear the losses. Losses incurred in support of uninsured depositors are recovered by special appraisals against banks as required by law.
The Federal Reserve also announced on Sunday that it will provide additional funding to qualifying depository institutions to ensure banks have the ability to meet the needs of all depositors. “The U.S. banking system remains resilient and on solid foundations,” the statement said. “These reforms and today’s actions demonstrate our commitment to taking the necessary steps to keep depositors’ savings safe.”
A “decisive action” to protect depositors’ savings is a welcome move. It is also a showcase example of why Bitcoin was created. The “Prime Minister on the Brink” message included in the genesis block was a clear comment on the technical inspiration by Satoshi his Nakamoto. We are now seeing a new iteration of the inevitable consequences of the fiat currency system. Hence, new proof of why Bitcoin exists.
