Regulators are working through the weekend to address the collapse of Silicon Valley Bank, Treasury Secretary Janet Yellen told CBS' "Face the Nation on Sunday, though she did not offer further details as to possible solutions.
Why it matters: The Biden administration is facing the potential for a catastrophic banking crisis unless the government can orchestrate a deal to rescue Silicon Valley Bank depositors before branches open tomorrow, Axios' Dan Primack and Felix Salmon write.
State of play: The Federal Deposit Insurance Corp (FDIC) insures banks' deposits up to $250,000 per depositor, but many of SVB's depositors had more than that in their accounts.
- "We certainly are working to address the situation in a timely way," Yellen replied when asked if a deal would be in place before markets in Asia open later Sunday and U.S. markets reopen Monday.
- "I do want to do is emphasize that the American banking system is really safe and well capitalized. It's resilient," Yellen said.
- The FDIC is likely considering a range of options to resolve the situation, including possible acquisition, Yellen noted.
The intrigue: Yellen noted that in the aftermath of the 2008 financial crisis, "there were investors and owners of systemic large banks that were bailed out."
- “The reforms that have been put in place means that we’re not going to do that again. But we are concerned about depositors and we’re focused on trying to meet their needs," she added.
Catch up quick: SVB is the country's 16th largest bank and one of the most popular financial institutions among tech and life sciences startups.
- Its the largest bank failure since Washington Mutual in 2008.
Our thought bubble, from Axios' Felix Salmon: During the financial crisis, the Federal Reserve guaranteed corporate transaction accounts under something called the Transaction Account Guarantee Program, or TAG.
- That, however, expired at the end of 2012. If Yellen were to resuscitate it, that would go a very long way toward preventing a broader banking crisis.
Go deeper:
- Biden on brink of banking crisis
- The rise and stunning fall of Silicon Valley Bank
- What to know about Silicon Valley Bank and bank runs
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