Banking Crisis: America in banking crisis, Treasury Secretary Janet Yellen said – threat to small banks remains – us treasury-secretary janet yellen gives big assurance to bank depositors

New Delhi: A banking crisis is looming over America. Two banks were locked in America within two weeks. At the same time, clouds of crisis are hovering over many banks. The scope of the banking crisis that started in the US after the failure of Silicon Valley Bank (SVB) is increasing. About 110 banks in the US may be in trouble like SVB Bank. In order to improve the banking situation, the Federal Reserve of America has provided financial assistance of $ 250 billion to the banks. Despite the help of the government, there is a continuous decline in the share of banks. At the same time, American Treasury Secretary Janet Yellen has defended the government, saying that the failures of some banks cannot be linked to the entire banking system. He said that America’s banking system has not failed.

US Treasury Secretary Janet Yellen on Tuesday sought to allay fears raised by some bank failures, saying the US banking system remains “robust” and that overall conditions are now stabilising. Yellen tried to allay fears raised by the failure of some banks at an American Bankers Association event. However, he added that further such failures could pose a risk to financial stability.

Silicon Valley Bank (SVB), based in Santa Clara, California, failed on March 10 after depositors fearful of the bank’s financial health rushed to withdraw their money. It was the second major bank failure in American history. A few days later, banking regulators declared New York-based Signature Bank a failure. All depositors of these two banks will be protected under the federal deposit insurance, the regulators said.

Last week another bank had reached the brink of collapse. But 11 US banks together saved San Francisco-based First Republic Bank from drowning by investing $ 30 billion. In this situation, the US government has also swung into action and is trying to restore people’s trust in the banking system. The Department of Justice and the Securities Commission have opened investigations into the sinking of the SVB. Apart from this, President Joe Biden has also called a meeting of Parliament to tighten the rules related to regional banks.

In this background, Yellen said that government intervention was necessary to protect the US banking system and that more such steps could be taken if needed. “Such steps will be necessary if deposits from small financial institutions start flowing in,” he said. He said, “I want to say clearly that the government is committed to take all necessary steps to protect the savings of depositors and the banking system. The US Finance Minister has to appear before two committees of Parliament this week where he can be questioned in this matter. Last week also she appeared before the Finance Committee of the Upper House Senate.