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US Backstops Bank Deposits to Avert Crisis After SVB Failure

  • Fed says new lending program to protect the nation’s deposits
  • US stocks rally, yields drop as traders unwind Fed hike bets
Bloomberg business news
WATCH: US authorities are preparing emergency measures to shore up banks and ensure they can meet potential demands by their customers to withdraw money as they seek to stave off a deeper crisis after SVB’s failure. Russell Ward reports.Source: Bloomberg
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US authorities took extraordinary measures to shore up confidence in the financial system after the collapse of Silicon Valley Bank, introducing a new backstop for banks that Federal Reserve officials said was big enough to protect the entire nation’s deposits.

The Sunday announcement by the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. followed a frantic weekend that saw the surprise closure of New York’s Signature Bank along with mounting concerns about spillover effects to other regional lenders and the wider economy.