Yellen said on Sunday that the government was working with the US deposit guarantee agency, the FDIC, on a “resolution” of the situation at SVB, where approximately 96 per cent of deposits are not covered by the FDIC’s reimbursement guarantee.
“I’m sure they (the FDIC) are considering a wide range of available options that include acquisitions,” she said.
Yellen said reforms made after the 2008 financial crisis meant the government was not considering a bailout for SVB.
“During the financial crisis, there were investors and owners of systemic large banks that were bailed out … and the reforms that have been put in place means that we’re not going to do that again,” she said.
“But we are concerned about depositors and focused on trying to meet their needs.”
Following the 2008 failure of Lehman Brothers and the ensuing financial meltdown, US regulators required major banks to hold additional capital in case of trouble.
US and European authorities also organise regular “stress tests” designed to uncover vulnerabilities at the largest banks.
