(ConservativeInsider.org) – When Silicon Valley Bank (SVB) collapsed and was bailed out by the federal government, many tech companies with money in the financial institution struggled to get their money out. This led to others pulling their savings from banks or moving their money around to somewhere they believed it would be safer. As Americans look towards a potentially rocky next few months with the economy, US Treasury Secretary Janet Yellen warned there may be more bailouts to come.
In remarks delivered on Tuesday, March 21, Yellen praised the government’s recent effort to “protect all depositors” who had money at SVB and Signature Bank. She also warned, “similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.” She tried to rally confidence in the banking system, highlighting that 11 major banks provided a $30 billion deposit to First Republic Bank recently to boost its liquidity and that a new federal lending program will help banks keep the minimum required cash on hand to meet legal requirements.
Treasury Secretary Yellen warns more bank bailouts could be coming | Just The News https://t.co/vwljEoTYK6
— John Solomon (@jsolomonReports) March 22, 2023
Yellen followed up her remarks the following day, telling lawmakers she has not proposed the Treasury move forward with “blanket insurance” that would cover bank deposits without getting approval from Congress. The FDIC has said any depletion of the deposit insurance fund from the recent bank collapses will be made up through a special assessment on banks. It is unknown whether banks would pass the additional cost onto their customers.
However, Heritage Foundation economist EJ Antoni told The Center Square if the fees are not passed onto the customers, then either the US Treasury will just give the money to the FDIC, which comes straight from taxpayer pockets, or the Fed can simply print the money. Antoni emphasized this last option “causes inflation, which is a hidden tax.”
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