Federal officials’ decision to recompense uninsured deposits at Signature and Silicon Valley banks and to open an emergency line of credit for the U.S. banking industry were sold to the public as a means to keep the financial system safe and reassure banks’ customers that their deposits were safe, according to the former Fed Head, Janet Yellen who is now playing the role as U.S. Treasury Secretary.
“We wanted to make sure the problems at Silicon Valley Bank (SVB) and Signature Bank didn’t undermine confidence in the soundness of banks around the country,” she explained. “We wanted to make sure there wasn’t contagion that could affect other banks and their depositors.”