The Secretary of the Treasury USAJanet Yellen, stated that the US banking system, affected by the recent bankruptcies of Silicon Valley Bank (SVB) and Signature Bank, it is “stabilizing” and remains strong thanks to “decisive” action by the government and the Federal Reserve (FED).
As recalled, the Treasury, the Fed and the Federal Deposit Insurance Corporation established plans to guarantee that their clients could access their deposits.
“The situation is stabilizing and the American banking system remains solid,” he said in a speech before the Bankers Association of the United States, meeting in Washington on Tuesday, March 21.
In addition, he specified that the situation at this time cannot be compared to the global financial crisis that took place in 2008, because currently the market “is “significantly stronger.”
For his part, Rob Nichols, president and executive director of the American Bankers Association (ABA), said that the banking sector continues to resist and has been able to cope with the crisis.
“The banking sector in general remains strong, resilient, well capitalized, with liquid and serves customers and communities very well,” Nichols said.
After the bankruptcy of the banking entities and in an attempt to curb the concerns, eleven US banks announced that they will inject US$30,000 million into First Republic.
In addition, another coalition of midsize US banks has asked federal regulators to guarantee all of their customers’ deposits for two years, a move designed to stop a “deposit exodus” from smaller banks, it reported. Bloomberg.
Contagion concerns spread to Europe, however, so Switzerland’s top lender UBS agreed to buy Credit Suisse, its rival and Switzerland’s second-largest bank, as part of an emergency bailout for ensure financial stability and protect the economy of that country.
Although US and European markets rallied at the start of the week, analysts say investors remain wary.
With information from EFE and AFP
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