U.S. Treasury Secretary Janet Yellen told lawmakers on Wednesday that she has not considered or discussed 'blanket insurance' to U.S. banking deposits without approval by Congress as a way to stem turmoil caused by two major bank failures this month.
the idea of raising the $250,000 insurance limit per depositor without congressional approval following the SVB and Signature closures.
"I have not considered or discussed anything having to do with blanket insurance or guarantees of deposits," she said. "The failure of a small bank, of a community bank, could likewise trigger a run on other banks," she said., which has lost much of its value since the U.S. banking crisis started on March 8, dropped 15.5% to end Wednesday at $13.33 following Yellen's remarks. The troubled San Francisco-based lender's efforts to secure a capital infusion has fueled speculation it may need a government backstop.
"To the best of my knowledge, we've never seen deposits flee at the pace that they did from Silicon Valley Bank," Yellen said.
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