Yellen Says U.S. May Intervene Again to Protect Banking System
Treasury Secretary Janet Yellen is expected to tell a banking industry group Tuesday that the federal government could step in again if other smaller institutions also suffer deposit runs to stop fear from spreading.
Yellen's prepared remarks for delivery Tuesday morning at the American Bankers Association's Washington, D.C., Summit, say that she is committed to keeping the banking system sound, offering calm after the failures of the Silicon Valley Bank, owned by $SVB Financial(SIVB.US)$, and $Signature Bank(SBNY.US)$. Federal regulators quickly moved in to shore up liquidity by setting up a new lending program and protected all uninsured deposits after the collapses.
"The situation is stabilizing. And the U.S. banking system remains sound, " Yellen's remarks say. "Our intervention was necessary to protect the broader U.S. banking system. And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion."
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Isn't prevention better than cure?
yes