The US Federal Reserve is considering creating a fund that would allow regulators to provide more support for deposits at troubled banks, following the collapse of Silicon Valley Bank.
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| Silicon Valley Bank headquarters in Santa Clara, California on March 10. Photo: THE NEW YORK TIMES |
According to Reuters, on March 11, Bloomberg News reported that the US Federal Reserve (FED) and the Federal Deposit Insurance Corporation are considering establishing a fund that would allow regulators to provide additional support for deposits at troubled banks, following the collapse of Silicon Valley Bank (SVB).
Regulators have discussed the move in meetings with bank executives and hope such measures will reassure depositors and help prevent any market panic, Bloomberg reported.
This is part of the Fed's contingency plan as confusion spreads about the state of the banking group focused on the venture capital and startup community.
Earlier, on March 11, US President Joe Biden discussed with California Governor Gavin Newsom the collapse of SVB and efforts to resolve the situation.
SVB collapsed after depositors rushed to withdraw their money from the bank due to concerns about its financial situation. This was the second largest commercial bank failure in US history, after Washington Mutual (WaMu) collapsed in 2008 during the financial crisis.
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