In an extraordinary joint statement, the Treasury, Federal Reserve, and the FDIC announced measures today to strengthen confidence in the U.S. banking system following the closure of Silicon Valley Bank (SVB).
These measures include:
The Federal Reserve Board further stated that these actions will "fully protect[] all depositors, both insured and uninsured" and "will reduce stress across the financial system, support financial stability, and minimize any impact on businesses, households, taxpayers, and the broader economy."
As a further measure, the Federal Reserve Board also announced that it will make available additional funding to eligible banks to help ensure banks have the ability to meet the needs of all their depositors, through the creation of a new Bank Term Funding Program (BTFP).
These developments are welcome reassurance of the U.S. government's commitment to taking the necessary steps to ensure that depositors' savings remain safe. Nevertheless, navigating the practical ramifications of SVB's closure and these developments will be challenging. For more information on legal issues arising from these developments or any related matter, please contact any member of Wilson Sonsini's corporate practice. For additional resources and the firm's most up-to-date information, please visit our Silicon Valley Bank Advisory Information page.