Janet Yellen: Further rescues of depositors could be needed if smaller lenders suffer bank runs | CNN Business

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The federal government could once again come to the rescue of uninsured bank depositors if smaller lenders suffer bank runs like the one that collapsed Silicon Valley Bank

Yellen argues the government’s “decisive and forceful actions” have successfully calmed the banking crisis and boosted confidence in the system. “The situation is stabilizing. And the US banking system remains sound,” Yellen said in the remarks, to be delivered at the American Bankers Association’s Washington DC Summit on Tuesday.

And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion,” Yellen said, adding that officials were not focused on “aiding specific banks or classes of banks.” Yellen added that the US actions “reduced the risk of further bank failures” that would have drained the FDIC’s insurance fund. Regional bank stocks have been volatile ever since the bank failures, with some lenders such as First Republic experiencing dramatic declines.

 

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