The Justice Department and the Securities and Exchange Commission have since launched investigations into the Silicon Valley Bank collapse.
A week after the second-largest bank collapse in U.S. history, Treasury Secretary Janet Yellen told the Senate Finance Committee on Thursday that the nation’s banking system “remains sound” and Americans “can feel confident” about their deposits.
Her remarks, coming against the backdrop of deepening concerns about the health of the global financial system, were an effort to signal to markets that there would be no broader contagion from the collapse of Silicon Valley Bank in California and Signature Bank in New York.
Facing fierce questioning by lawmakers on how Federal Reserve interest rates contributed to the bank failures and whether taxpayers would bear the brunt of the commitment to make depositors at the banks whole, Yellen stressed the need for the federal government to act to assure stability in the market.
“We certainly need to analyze carefully what happened to trigger these bank failures and examine our rules and supervision” to prevent failures from happening again, Yellen told the committee.
Yellen was the first Biden administration official to face lawmakers over the decision to protect uninsured money at two failed regional banks, a move that some have criticized as a bank “bailout.
