US rejects bailout for Silicon Valley Bank

ANKARA

The US treasury secretary said Sunday that the federal government will not provide a bailout for Silicon Valley Bank’s (SVB) investors amid the sudden collapse that caused turmoil in US financial markets this week.

"During the financial crisis, there were investors and owners of systemic large banks that were bailed out. And the reforms that have been put in place means that we're not going to do that again,” Janet Yellen said in an interview with CBS’ Face The Nation public affairs program.

Yellen said that financial regulators are “concerned” about the effect to depositors and are focused on addressing their needs.

Yellen, however, said they are making efforts to hinder the fallout from spreading to other institutions.

"We want to make sure that the troubles that exist at one bank don't create contagion to others that are sound," she said. "The goal always of supervision and regulation is to make sure that contagion can't occur."

US regulators have shut down SVB amid its sudden collapse, the Federal Deposit Insurance Corporation (FDIC) announced in a statement on Friday.

SVB was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver, it said.

SVB, the commercial bank headquartered in Santa Clara, was the largest bank in Silicon Valley based on local deposits and it was among the biggest banks in the nation.

It had approximately $209 billion in total assets and around $175.4 billion in total deposits as of the end of 2022, while it sold this week its $21 billion bond portfolio at a $1.8 billion loss.

Its sudden collapse left many venture capital firms and millions of individuals in the US tech sector with uncertainty surrounding their deposits, loans, and investments, also sending ripples among tech firms trading on the Nasdaq and the cryptocurrency community.