Federal Reserve Chief Michelle Bowman said, US banking system flexible and strong
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Washington: In the midst of the growing banking crisis in the United States, two of its big banks collapsed, causing an atmosphere of panic around the world. Meanwhile, there is also news that US Federal Reserve Governor Michelle Bowman has reaffirmed that America’s banking system remains resilient and strong.
Addressing the Independent Community Bankers of America (ICBA), he said that the US banking system remains resilient and sound with strong capital and liquidity in the system. The Board continues to carefully monitor developments in the financial markets and the financial system. On Friday, Silicon Valley Bank, one of America’s biggest banks, collapsed. After this, on last Sunday, America’s second Signature Bank was also closed.
Federal Reserve Chief Bowman said there was a rapid attempt to withdraw more than $250,000 insured by the FDIC after the stress at each institution and then the subsequent bank closure. In both cases, the Federal Deposit Insurance Corporation (FDIC) was appointed receiver, which usually means that it will liquidate the bank’s assets to pay back its customers, depositors and others.
Federal Reserve committed to provide money
In addition, the Federal Reserve Board announced that it would provide additional funding to eligible depository institutions to help ensure banks’ ability to meet the needs of all their depositors. The FDIC also took action to protect all depositors, including uninsured depositors at Silicon Valley Bank and Signature Bank. From Monday morning, these depositors were able to access all their funds on deposit with these banks. Bowman said federal regulators including the FDIC, Federal Reserve Board and US Treasury Secretary Janet Yellen approved the action to protect depositors.
Joe Biden gave confidence to depositors
On the other hand, after the closure of America’s big bank Silicon Valley Bank last Friday, President Joe Biden also assured his people that the American banking system is completely safe. Joe Biden had said that small businesses across the country that had accounts at Silicon Valley Bank and Signature Bank could heave a sigh of relief knowing that they would be able to pay their employees. Taxpayers will not spend a single penny in this. This will be paid from the Fee Deposit Insurance Fund to be made by the banks.
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