Banks across country shoring up liquidity
March 23, 2023
Over the past two weeks, many mid-sized banks expressed “great concern” to the Treasury about their uninsured deposits, Yellen told a Senate Appropriations subcommittee.
“Many of these banks felt very skittish about their potential to suffer runs as well,” Yellen said. “We can see that banks across the country are shoring up their liquidity, they are very worried about contagion from the troubles of Silicon Valley Bank and Signature Bank. And the steps we took were designed to improve the confidence of all depositors that they’re safe in banks.”
She said regulators aren’t looking to provide “blanket” deposit insurance to stabilise the US banking system without working with lawmakers, and that the heads of recently failed American lender should be held accountable.
“I have not considered or discussed anything having to do with blanket insurance or guarantees of deposits,” Yellen said Wednesday during a hearing before a Senate subcommittee, answering a question about whether the protections for all US deposits would require congressional approval. She didn’t clarify if that refers to a temporary or permanent change in the cap.