Treasury’s Yellen gathers bank regulators over closure of Silicon Valley Bank; calls banking system ‘resilient’

Federal banking regulators met Friday afternoon with the Secretary of the Treasury to discuss developments around the closure of a Santa Clara, Calif., bank, the Treasury Department said.

In a release, the Treasury Department said Secretary Janet L. Yellen “convened leaders from the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) to discuss developments around Silicon Valley Bank.” The release did not specify who those leaders were.

“Secretary Yellen expressed full confidence in banking regulators to take appropriate actions in response and noted that the banking system remains resilient and regulators have effective tools to address this type of event,” Treasury’s release stated.

Earlier in the day, the FDIC became the receiver for the California bank after it was closed by state regulators. According to press reports, the bank was facing run from depositors. The FDIC then created a new bank – Deposit Insurance National Bank of Santa Clara (DINB) – and immediately transferred to the DINB all insured deposits of Silicon Valley Bank.

The FDIC, in a release, said all insured depositors (those with deposits of up to $250,000) will have full access to their insured deposits no later than Monday, March 13. Uninsured depositors, the agency said, will be paid an advance dividend within the next week. Uninsured depositors will also get a receivership certificate for the remaining amount of their uninsured funds, FDIC said.

The agency also plans to sell off the assets of the closed bank and said that future dividend payments from the proceeds of those sales may be made to uninsured depositors.

Secretary of the Treasury Janet L. Yellen Convenes Financial Regulators

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