The Federal Reserve issued a joint pair of statements on Sunday with one clear message: Silicon Valley Bank depositors, both insured and uninsured, will receive assistance in a way that will “fully protect everyone.” Depositors, the statement reads, “will have access to all of their funds beginning Monday, March 13. No losses related to the Silicon Valley Bank resolution will be borne by taxpayers.”
The move comes after a recommendation from boards of directors of the Federal Reserve and Federal Deposit Insurance, and a meeting with the president, Treasury Secretary Janet Yellen
“approved actions to enable the FDIC to complete resolution of Silicon Valley Bank in a manner that fully protects all depositors, both insured and uninsured.”
The statement, released by Yellen, Federal Reserve Board Chairman Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg, also says the Federal Reserve is ready to address any liquidity issues.
Here’s what to expect: The funding will only be made available through the creation of a new Bank Term Funding Program, which will offer 1-year loans to banks, savings unions and credit unions, as well as other depository institutions. There will also be a $25 billion backstop for the BTFP, though the Reserve wrote in the statement that it doesn’t expect access to that backstop “will be necessary.”
“The council is closely monitoring conditions across the financial system and stands ready to use its full range of tools to support households and businesses, and will take additional action as necessary,” the statement read.