No Cause for Alarm: Janet Yellen to Reassure Congress U.S. Banking System ‘Remains Sound’

The US banking system “remains healthy” and Americans can feel “confident” about their deposits without having to panic about recent events, Treasury Secretary Janet Yellen is set to tell the Senate Finance Committee on Thursday.

Her testimony will come a week after the second largest bank collapse in US history.

AP reports Yellen will be the first Biden administration official to confront lawmakers over the decision to protect uninsured funds in two failing regional banks, a move critics have called a bank “bailout”.

“The government took decisive and strong action to enhance public confidence” in the US banking system, Yellen says, in prepared testimony released before her appearance.

“I can assure the committee members that our banking system remains intact, and that Americans can feel confident that their deposits will be there when they need them.”

In her prepared remarks, she made no mention of the situation surrounding Credit Suisse, which saw its shares plunge Wednesday before regulators pledged to provide liquidity to the major Swiss lender, Breitbart News reported.

Yellen’s words of reassurance come in the face of a turbulent week for the international banking system.

In the past seven days, the Silicon Valley Bank (SVB), based in Santa Clara, California, has failed after depositors rushed to withdraw funds amid concern about the bank’s ongoing health.

CONTAGION: Customers line up outside First Republic Bank to withdraw money after the SVB collapse

Credit: Dr_PhillipB via Spectee/TMX

Regulators then got together over the weekend and declared Signature Bank of New York a failure as well.

All depositors, including those with uninsured funds exceeding $250,000, have been reassured that they are still protected by Federal Deposit Insurance.

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