Washington (EFE).- The US Treasury Secretary, Janet Yellen, stressed this Thursday that taxpayers will not assume the losses of banks that fail and warned that neither shareholders nor bondholders are protected by the Government.
“It is important to be clear: shareholders and bondholders of failed banks are not being protected by the government. And no loss of these banks will fall on the taxpayer”, stressed the person in charge before the Financial Services Subcommittee of the House of Representatives.
Yellen alluded to the bankruptcy in the US of the Silicon Valley Bank (SVB) and Signature Bank in the last two weeks and the rescue of the First Republic Bank by the main banking corporations with an injection of 30,000 million dollars .
Avoid contagion from other banks
Among other measures, US regulators opted to guarantee all deposits from both entities, beyond the standard limit of $250,000 per client, in order to contain panic and allow affected companies to continue operating.
“We use important tools to act quickly to avoid contagion. They are tools we could use again. The strong actions taken ensure that Americans’ deposits are safe. We would certainly be prepared to take further action if warranted,” he maintained.
The Administration’s priority, he concluded, is “to protect the health of the US economy” and to do what is necessary “to strengthen public confidence in the US banking system.”
Yellen has been sending messages of calm to the markets for several days, ensuring that the banking system is solid.
The Federal Reserve announced on Wednesday an increase in interest rates of 0.25 points, which are located in a range of between 4.75% and 5%, although its president, Jerome Powell, hinted that these increases could be pause the future in the face of the banking crisis.