WILMINGTON, Del. (AP) 鈥� Treasury Secretary Janet Yellen said Sunday that the federal government would not bail out , but is working to help .
The Federal Deposit Insurance Corporation insures deposits up to $250,000, but many of the companies and wealthy people who used 鈥� known for its relationships with technology startups and venture capital 鈥� had more than that amount in their account. There are fears that some workers across the country won't receive their paychecks.
Yellen, in an interview with CBS' 鈥淔ace the Nation,鈥� provided few details on the government's next steps. But she emphasized that from the financial crisis almost 15 years ago, which led to bank bailouts to protect the industry.
鈥淲e鈥檙e not going to do that again," she said. "But we are concerned about depositors, and we鈥檙e focused on trying to meet their needs.鈥�
, Yellen tried to reassure Americans that there will be no domino effect after the collapse of Silicon Valley Bank.
鈥淭he American banking system is really safe and well capitalized," she said. "It鈥檚 resilient.鈥�
Silicon Valley Bank is the nation鈥檚 16th-largest bank. It was the second biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008. The bank served mostly technology workers and venture capital-backed companies, including some of the industry鈥檚 best-known brands.
Silicon Valley Bank began its slid into insolvency when its customers, largely technology companies that needed cash as they struggled to get financing, began withdrawing their deposits. The bank had to sell bonds at a loss to cover the withdrawals, leading to the largest failure of a U.S. financial institution since the height of the financial crisis.
Yellen described rising interest rates, which have been to combat inflation, as the core problem for Silicon Valley Bank. Many of its assets, such as bonds or mortgage-backed securities, lost market value as rates climbed.
鈥淭he problems with the tech sector aren鈥檛 at the heart of the problems at this bank,鈥� she said.
Yellen said she expected regulators to consider 鈥渁 wide range of available options,鈥� including the acquisition of Silicon Valley Bank by another institution. So far, however, no buyer has stepped forward.
Regulators seized the bank's assets on Friday. Deposits that are insured by the federal government are supposed to be available by Monday morning.
鈥淚鈥檝e been working all weekend with our banking regulators to design appropriate policies to address this situation," Yellen said. "I can鈥檛 really provide further details at this time.鈥�
President Joe Biden and Gov. Gavin Newsom, D-Calif., spoke about 鈥渆fforts to address the situation鈥� on Saturday, although the White House did not provide additional details on next steps.
Newsom said the goal was to 鈥渟tabilize the situation as quickly as possible, to protect jobs, people鈥檚 livelihoods, and the entire innovation ecosystem that has served as a tent pole for our economy.鈥�
Chris Megerian, The Associated Press
