![]() ![]() She talked with McHenry and other lawmakers who wanted to know whether the actions would lead to more regulation. Yellen also had to assuage Republicans in Congress. And do it all before Asian markets opened for the week. Yellen and other federal officials met to ensure the bank could make payroll by the coming Monday, and that no taxpayer money would be used to fund the rescue. That weekend, staff from Treasury, the Fed, and FDIC began the search for a potential buyer for the bank. Regulators rushed to place Silicon Valley Bank into FDIC receivership. On the next afternoon, Yellen spoke with Fed Chair Jerome Powell, FDIC head Martin Gruenberg, acting head of the OCC Michael Hsu and San Francisco Fed chair Mary Daly. That caused depositors on Thursday, March 9, to rush to withdraw their funds en masse. The bank held an unusually high level of uninsured deposits, and many investments in long-term government bonds and mortgage-backed securities had tumbled in value as interest rates rose. Silicon Valley Bank's chief executive officer, Greg Becker had sent a letter to shareholders stating that the bank would need to raise $2.25 billion to shore up its finances after suffering significant losses. The crisis became apparent on Wednesday, March 8. Regional and community banking organizations constitute the largest number of banking institutions supervised by the Federal Reserve. The Fed defines regional banks as those with total assets between $10 billion to $100 billion, not as small as community banks and not as large as national ones. His words to Yellen as she navigated the bank collapses: “We are fighting for the survival of our regional banks." Morgan & Chase.īut few could relate as well as Paulson, who had asked Congress for authority to buy up $700 billion in distressed mortgage-related assets from private firms to save the larger U.S. and Wall Street executives such as Jamie Dimon, the chief executive of J.P. ![]() and the Office of the Comptroller of the Currency lawmakers, including congressional leaders on banking - Sen. Yellen spent that crucial period two weeks ago assembling Federal Reserve officials regulators at the Federal Deposit Insurance Corp. That experience was put to a severe test as she worked to assure multiple constituencies, including financial markets, balky Republicans in Congress and President Joe Biden's White House economic team. Perhaps no treasury secretary has come to the office with Yellen's ample resume, including service as the chair of the Federal Reserve and a lifetime of studying economics and finance. The move panicked shareholders and depositors, stirring stark reminders of earlier failures that triggered the Great Recession. Regulators took it over by that Friday afternoon. ![]() And to do that requires a powerful and quick government response,” Paulson said, recounting what he told Yellen.Ī bank run on Silicon Valley Bank had begun earlier in the week. “It’s really hard to stop or even slow down a bank run. Paulson, who ran the Treasury Department during the financial crisis in 2008, counseled immediate government action. She quickly turned to someone who had been through the fire before, and on a much larger scale: Hank Paulson. Android is a trademark of Google, Inc.WASHINGTON – Working against the clock to stop a developing banking crisis, Treasury Secretary Janet Yellen had until sunset on Sunday, March 12, to come up with a plan to calm the U.S. **iPhone is a federally registered trademark of Apple, Inc. Not only is Highlands Community Bank mobile banking safe and convenient, it's also free! Sign up today.
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