“Our banking system remains sound and Americans can feel confident that their deposits will be there when they need them,” Yellen said.
Yellen has been at the center of emergency federal efforts this past week to return deposits to account holders at two failed banks, the California-based Silicon Valley Bank and the crypto-heavy Signature Bank, based in New York.
To shore up troubled banks facing a surge in cash withdrawals, the Federal Reserve also created a new lending program that Yellen said would “provide additional support” to the banking system. “This will help financial institutions meet the needs of all of their depositors.”
“This week’s actions demonstrate our resolute commitment to ensure that depositors’ savings remain safe,” Yellen told the senators.
Democrats and Republicans in Congress have largely supported the emergency actions, but as markets recover somewhat, lawmakers have begun questioning whether the backstops will become a new norm.
“I’m concerned about the precedent of guaranteeing all deposits and the market expectation moving forward,” said Sen. Mike Crapo, R-Idaho.
This is a developing story, please check back for updates.