Following the collapse of Silicon Valley Bank, regulators step in to protect depositors, as another bank, Signature, also shuts down.

On Sunday evening, US financial regulators announced emergency measures to prevent further financial instability after Silicon Valley Bank’s collapse. The key step was ensuring that all depositors at the failed bank would have immediate access to their full deposits by the following Monday morning.

A joint statement from Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell, and Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg confirmed the move, stating, “Depositors will have access to all of their funds starting Monday, March 13. No taxpayer money will be lost in the resolution of Silicon Valley Bank.”

The announcement followed a similar move to close Signature Bank, marking the second bank failure within the same week. Regulators reassured that depositors at Signature Bank would also be fully reimbursed.

Capital Economics analyst Paul Ashworth commented on the situation, noting, “While this measure should theoretically prevent contagion, fear and irrational behavior have historically driven such financial crises. There’s no certainty that this action will completely prevent further fallout.”

This coordinated response comes at a time of heightened concern over the stability of the banking sector, with fears that digital banking’s rapid pace could amplify the risk of contagion.