(Washington) US Treasury Secretary Janet Yellen will try on Thursday to convince US parliamentarians of the soundness of the US banking system, after the bankruptcy of the SVB bank, while the setbacks of the Swiss Credit Suisse make fear of contagion.
Joe Biden’s Minister of Economy and Finance, who will speak in the morning before the members of the Senate Banking Committee, will try to “reassure them […] that our banking system remains solid and that Americans can be sure that the money they have deposited will be available when they need it,” according to the text of his speech, published earlier in the morning.
“This week’s actions demonstrate our resolute commitment to ensuring the safety of depositors’ savings,” she told them.
Janet Yellen will be heard by these senators on Joe Biden’s draft budget for 2024, presented just a week ago. But his comments about the situation on the banking front, which is rocking the markets, will be scrutinized.
On Sunday, the American authorities announced that they were going to guarantee the withdrawal of all deposits from SVB and allow access to all deposits from Signature Bank, a New York establishment which was automatically closed on Sunday by the American regulator.
In addition, the Federal Reserve – the Fed, the US central bank – has undertaken to lend the necessary funds to other banks that need them to honor withdrawal requests from their customers.
“We worked with the Federal Reserve and the FDIC (the banking regulator, editor’s note) to protect all depositors of the two failed banks. On Monday morning, customers were able to access all the money in their deposit accounts so that they could payroll and pay bills,” recalls Janet Yellen, while “shareholders and creditors are not protected by the government “.
“It is important to note that taxpayers’ money is not being used or put at risk with this action,” the minister will further emphasize.
It is now the Swiss banking giant Credit Suisse which is in turmoil. The bank will borrow in the short term up to 50 billion Swiss francs (50.7 billion euros) from the Swiss central bank.
The Swiss federal government will hold a special meeting on Credit Suisse on Thursday, the day after a historic fall in its stock market share.
After plunging 24.24% on the Zurich Stock Exchange on Wednesday, the Swiss bank’s stock rebounded more than 30% at the opening on Thursday. Around 6:50 a.m. (Eastern time), the stock rose 25.57% to 2.12 Swiss francs.
