March 12, 2023 7:37pm

Regulators announced a plan to backstop all the depositors in failed Silicon Valley Bank and make additional funding available for other banks.

The Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. jointly announced the efforts Sunday aimed at strengthening confidence in the banking system after SVB’s failure on Friday spurred concern about spillover effects.

The Fed in a separate statement said it’s creating a new “Bank Term Funding Program” that offers loans to banks under easier terms than are typically provided by the central bank.

  • The Treasury will “make available up to $25 billion from the Exchange Stabilization Fund as a backstop” for the bank funding program but the Fed doesn’t expect to draw on the funds.
  • Under the new program, which provides loans of up to one year, collateral will be valued at par, or 100 cents on the dollar. That means banks can get bigger loans than usual for securities that are worth less than that — such as Treasuries that have declined in value as the Fed raised interest rates. <Bloomberg>


The Bottom Line:

All Silicon Valley Bank (SVB) depositors will have access to their money starting Monday, according to a joint statement from the Treasury Department, Federal Reserve and the FDIC.

As if economic data releases were hard enough to hurdle i.e.; share pricing deep dives in the new month’s eight (8) sessions contributes, following the collapse of Silicon Valley Bank (SVB) that effected not just investors and companies but, employee’s payrolls contributing to the last week’s conflagration