The US government wants to prevent the bankruptcy of the US bank Silicon Valley Bank (SVB) from causing contagion to the rest of the banking system, US Treasury Secretary Janet Yellen said on Sunday, who nevertheless ruled out a bailout of the establishment. .
“We want to make sure that the problems that affect one bank do not create contagion to others that are solid,” said the American Minister of Finance during an interview with CBS.
The Deposit Guarantee Agency (FDIC), an offshoot of the US government, took control of SVB on Friday, on the verge of implosion, under the effect of massive withdrawals from its customers.
If the big banks have so far been spared, several medium-sized or regional establishments unscrewed on the stock market on Friday, fled by worried investors.
This is particularly the case of the Californian First Republic, which dropped nearly 30% in two sessions, Thursday and Friday, or Signature Bank, cut by a third of its value since Wednesday evening.
Both institutions have a large proportion of corporate clients in their portfolio, whose deposits often exceed the FDIC’s maximum insured amount of $250,000 per depositor, which could lead them to withdraw their funds.
Janet Yellen explained Sunday that the government was working this weekend, with the FDIC, to “resolve” the situation of SVB, of which approximately 96% of the deposits are not covered by the refund guarantee of the FDIC.
“I am sure (the FDIC) is considering a wide range of solutions, which includes an acquisition” by another bank, said the Treasury Secretary.
Virginia Democratic Senator Mark Warner said Sunday on the ABC channel that the announcement of a takeover of SVB by a financial institution before the opening of Asian markets would be “the best solution”.
Futures contracts on the flagship indices of the Tokyo and Hong Kong stock exchanges suggested an opening down just under 2%.
No public rescue
Janet Yellen, on the other hand, ruled out a bailout of SVB via an injection of public money.
“During the financial crisis (of 2008), investors in large systemic banks”, whose fall the authorities believe would pose a risk to the entire financial system, “were rescued” by the American government, a-t- she called back. “We’re not going to do it again. »
In September 2008, to avoid a collapse of the financial system, the American authorities thus injected hundreds of billions of dollars into most of the big names in the market, funds that the government then recovered.
Several personalities from finance and the world of new technologies have however pleaded, since Friday, for a bailout of SVB.
Because in addition to the stability of the banking system, many say they are concerned about the repercussions of the bankruptcy of the Californian bank on the technological sector, American but also beyond.
SVB boasted that its clients were “nearly half” of technology and life sciences companies financed by American investors.
“Many of the depositors are small businesses that need to be able to access their funds to pay their bills and they employ tens of thousands of people” in the United States, noted Mr.me Yelen. “It is a problem and we are working with regulators to find a solution,” she continued.
International concerns
On Sunday, UK Finance Minister Jeremy Hunt said the fall of SVB posed a “serious risk” to the tech sector.
Several entrepreneurs have also alerted, in recent hours, to a possible shock wave for Indian technology startups, some of which were customers of the bank.
The turmoil of this saga has also spread in the middle of cryptocurrencies.
The USDC digital currency, known as “stable” because it is theoretically pegged to the dollar, has thus fallen since Friday after its creator, Circle, announced that it had left 3.3 billion dollars in the coffers of SVB.
Several other “stablecoins”, supposed to protect cryptocurrency investors against the legendary volatility of this industry, have also stalled, such as the Dai or the USDD.