According to the text of her speech, made public this morning, Joe Biden’s Finance and Economy Officer will address the members of the Senate Banking Committee to “assure them (…) that our banking system remains solid and that the Americans can be sure that the money they deposited will be available when they need it.
“This week’s actions demonstrate our firm commitment to ensuring the safety of depositors’ savings”will tell.
Yellen will be heard by senators under President Joe Biden’s 2024 budget bill, which was introduced just a week ago. However, her words on the situation on the banking front, which is rocking the markets, will be scrutinized.
On Sundaythe US authorities announced that they will guarantee full withdrawal to SVB depositors and will allow access to all Signature Bank deposits, a New York bank that was shut down by the US regulator.
In addition, the US Federal Reserve (Fed, central bank) has pledged to lend the necessary funds to other banks that need them to meet withdrawal requests from their customers.
“We worked with the Federal Reserve and the FDIC (Federal Deposit Insurance Corporation) to protect all depositors of the two failing banks. On Monday morning, customers were able to access all the money in their accounts so they could make their payroll and bill payments,” Yellen recalled, while “shareholders and creditors are not protected by the government.
“It is important to note that taxpayer money is not being used or risked with this action”the official will warn.
The one that now sees a crisis coming is the Credit Suisse bank, whose title fell 24.24% at the close of the markets and which announced on Wednesday that it will borrow up to 53.7 billion dollars in the short term from the Swiss central bank.