After the rapid collapse of Silicon Valley Bank and Signature Bank earlier this month, along with Credit Suisse’s untimely demise last week, regulators and business leaders have made it a point to publicly assure consumers that banks are safe. The potential for “contagion” throughout the financial system is now slim after the Federal Deposit Insurance Corp. (FDIC), Federal Reserve, and Treasury came together to backstop all depositors, both uninsured and insured, at SVB and Signature, they say.
Treasury Secretary Janet Yellen, for example, told lawmakers on the Senate Finance Committee last week after the second- and third-largest bank failures in history that Americans “can feel confident” about the safety of their deposits. And Citigroup CEO Jane Fraser told the Economic Club of Washington D.C. on Wednesday that the banking system is “sound,” and both large and regional banks are “well-capitalized,” adding “this is not a credit crisis,” Reuters reported.
