Top financial officials are reportedly weighing the possibility of backstopping Silicon Valley Bank depositors during the sprint to find a buyer.
Two options on the table are for regulators to tap into powers from the Federal Deposit Insurance Act to safeguard uninsured deposits at SVB or to establish a"general banking facility" from the Federal Reserve to buttress other financials with direct exposure to SVB, according to multiple reports.
But in the event that a buyer fails to emerge, officials at the FDIC, Treasury Department, and Fed are pouring through their options. SVB collapsed Friday after investors became rattled with the company following revelations it sold numerous securities at a loss and moved to raise capital. SVB had been loaded up on treasuries which have been under pressure as the Fed jacks up interest rates. It has also been squeezed by belt-tightening and headwinds dogging the tech industry.
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