WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen met with banking regulators on Friday on the collapse of SVB Financial Group as she and the White House expressed confidence in their abilities to respond to the largest bank failure since the 2008 financial crisis.
Yellen met with officials from the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency on Friday to discuss developments with SVB, which does business as Silicon Valley Bank, Treasury said in a statement.
“Secretary Yellen expressed full confidence in banking regulators to take appropriate actions in response and noted that the banking system remains resilient and regulators have effective tools to address this type of event,” it said.
California banking regulators on Friday closed SVB, appointing the FDIC as receiver to protect depositors at the startup-focused lender.
Cecilia Rouse, who chairs the Council of Economic Advisers, told reporters at the White House that the U.S. banking system was fundamentally different and stronger than it was during the 2008 financial crisis, and regulators were prepared to use the “better tools” they have developed to protect investments.
Rouse said the Federal Deposit Insurance Corp had stepped in very quickly to protect the deposits of up to $250,000.
“Our banking system is far more resilient than it was in 2008. We’ve learned a lot. We’ve got better tools,” she said.
She noted that banks now had to undergo stress tests and hold more capital than during the last crisis.
“We put in guardrails, and our regulators have much visibility into the banking sector than they did a decade ago.”
In testimony earlier on Friday before the U.S. House of Representatives Ways and Means Committee, Yellen was asked about SVB’s situation and said: “There are recent developments that concern a few banks that I’m monitoring very carefully. And when banks experience financial losses, it is and should be a matter of concern.”
(Reporting by David Lawder, Andrea Shalal, Jeff Mason and Paul Grant; Editing by Paul Simao and David Gregorio)