Yellen says Treasury is ready to take 'additional actions if warranted' to stabilize banks

WASHINGTON — Treasury Secretary Janet Yellen said Thursday that the national exigency actions to backmost up Silicon Valley Bank and Signature Bank customers could beryllium deployed again successful the aboriginal if necessary.

"We person utilized important tools to enactment rapidly to forestall contagion. And they are tools we could usage again," Yellen said successful written grounds earlier a House Appropriations subcommittee.

"The beardown actions we person taken guarantee that Americans' deposits are safe. Certainly, we would beryllium prepared to instrumentality further actions if warranted," she added.

Yellen's grounds came amid increasing marketplace concerns implicit tiny and mid-sized determination banks that person experienced a unreserved of withdrawals successful the aftermath of the SVB collapse, and specifically whether the national authorities is prepared to backstop these banks successful the lawsuit of a run.

In Washington, Yellen has drawn disapproval from lawmakers who reason that the determination to insure deposits astatine SVB and Signature amounted to a reward for large banks that took excessive risks.

Meanwhile, lawmakers say, smaller institutions are being forced to face a spike successful deposit outflows — triggered by nationalist fears astir the large banks — without immoderate peculiar help.

Regional slope stocks fell Wednesday successful portion due to the fact that of comments Yellen made astatine a Senate proceeding past week, successful which she said Treasury is not considering immoderate plans to insure each U.S. slope deposits without legislature approval.

Uninsured deposits, she told lawmakers past week, would lone beryllium covered successful the lawsuit that a "failure to support uninsured depositors would make systemic hazard and important economical and fiscal consequences."

Thursday's remarks appeared to deliberately permission unfastened the imaginable that, portion cosmopolitan deposit security cannot beryllium enacted without a measure from Congress, Treasury is inactive acceptable to instrumentality aboriginal exigency actions to forestall broader contagion and sphere large-scale fiscal stability.

Congress has wide authorization implicit the FDIC security limit, presently acceptable astatine $250,000 as portion of the Dodd-Frank fiscal reforms. Congress tin also temporarily suspend the limit, similar it did successful 2020 arsenic portion of the government's effect to Covid-19.

This clip around, lone a handful of Democrats have openly suggested Congress see raising the bounds crossed each deposits. An influential bloc of House Republicans, meanwhile, has already travel retired against immoderate hike. This makes it hard to envision however a measure to rise the bounds would walk the GOP-controlled House.