What Janet Yellen Did & Didn't Do To Bail Out Silicon Valley Bank (my words)

[Joinfortmill]

https://heathercoxrichardson.substack.com/p/march-12-2023?utm_source=substack&utm_medium

Letters from an American: Heather Cox Richardson

'Secretary Yellen has signed off on measures to enable the FDIC to fully protect everyone who had money in Silicon Valley Bank, Santa Clara, California, and Signature Bank, New York. They will have access to all of their money starting Monday, March 13. None of the losses associated with this resolution, the statement said, “will be borne by the taxpayer.”

But, it continued, “Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.”...The statement ended by assuring Americans that “the U.S. banking system remains resilient and on a solid foundation...'

[2naSalit]

1. K&R

[DFW]

2. Who are the "unsecured debtholders" who are NOT protected?

The bank's creditors, or people with certain kinds of assets with the bank that do not include cash or savings accounts? I'm not enough of a finance person to decipher what that meant. I would imagine that Yellen and all parties involved are most interested in making this as small a ripple as possible, and that other banks would rather contribute to a fund to keep SVB's depositors happy rather than risk deeper scrutiny of their own banks. I'm sure the practice that brought SVB down was not unique to them, and no one wants a sudden run on banks nationwide. I notice the price of gold has taken quite a jump since last week, without any other glaring reason for it. It's not the end of the month (position squaring), Putin hasn't taken Kyiv, and Ryadh and Tehran actually shook hands instead of blowing up each other's proxies in Yemen for a day or two.