Bailout

~ susie

Unfortunately, I don’t think they had much choice about this. But that doesn’t mean I like it. Via the Washington Post:

The Biden administration announced Sunday night that all depositors at the failed Silicon Valley Bank would have access to all their money on Monday morning, approving an extraordinary intervention aimed at averting a crisis in the financial markets.

Authorities said they were also extending protection to depositors of a second bank, Signature Bank of New York, which state regulators closed on Sunday as unease in the financial sector appeared to spread. Separately, the Federal Reserve announced that it was creating a new lending facility for the nation’s banks, designed to buttress them against financial risks caused by Friday’s collapse of SVB.

The series of crisis maneuvers by federal authorities — announced just hours before the start of trading in Asia — reflected the fear that has rippled through the banking sector just a few days after the collapse of Silicon Valley Bank, which many financial experts thought initially was confined to one part of the economy.

The decision by Treasury to backstop all of SVB’s deposits — not just those up to $250,000 that are automatically insured under federal law — will likely ignite a political firestorm over the decision to protect the assets of tech firms, venture capitalists, and other rich people in California.

Published by susie