Deposit flows in the U.S. banking system have stabilized in the last week after a historic run on deposits at Silicon Valley Bank prompted its collapse and forced finance officials to take emergency actions to shore up the system. | Reuters
Indeed, Powell opened his press conference with a preamble devoted to an assurance that the banking system is sound and officials stand ready toIn the case of Silicon Valley Bank and Signature Bank, which also failed, Fed officials, alongside those from theDeposit Insurance Corp and Treasury Secretary Janet Yellen, invoked emergency powers to keep all deposits at both banks whole, even those that exceeded the FDIC’s $250,000-per-depositor insurance limit.
“These actions demonstrate that all depositors’ savings in the banking system are safe,” Powell said. That said, when later asked if that meant that “de facto deposit insurance covers all savings,” Powell said: “I’m not saying anything more than I’m saying.” “So what I’m saying is you’ve seen that we have the tools to protect depositors when there’s a threat of serioe those tools. And I think depositors should assume that their deposits are safe and secure.”
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