SVB's collapse has rocked the US banking system. Now, to prevent its depositors from panicking, the FDIC, US Treasury, and Federal Reserve have released a joint statement to soothe nerves.
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Why was the decision taken?
US government claims that the decision to regulate SVB was taken to strengthen public confidence in the banking system and aid in providing credit to households/businesses.
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Other steps
SVB will assess losses incurred to support uninsured depositors, the senior management has been removed, and extra funding will be provided to eligible depository institutions.
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President Biden's vow
Biden has vowed to hold accountable those responsible for SVB's collapse, and strengthen banking regulations. He urged Americans to remain confident in banking system.
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SVB's history
SVB, founded in 1983, had $209 billion in total assets by the end of 2022. It was one of the top 20 commercial banks in the US and did business with half of VC-backed start-ups.