The U.S. government took exceptional measures on Sunday to prevent a potential financial crisis following the historic bankruptcy of Silicon Valley Bank, promising all depositors at the failing firm that they would have prompt access to their funds despite the closure of another large bank.

There were worries that the conditions that led to the failure of the Santa Clara, California-based bank may spread. The weekend was spent by regulators searching for a buyer for the bank, which was the second-largest bank failure in history. Sunday, these attempts looked to have failed.

Sunday, officials revealed that New York’s Signature Bank had also collapsed and was being seized as an indication of how rapidly the financial crisis was spreading. Signature Bank, with assets over $110 billion, is the third-largest bank collapse in U.S. history.

Before trading opened on Monday, Asian markets were nervous due to the near-financial calamity that U.S. policymakers had to avoid. In early trade, Japan’s Nikkei 225 fell 1.8%, Australia’s S&P/ASX 200 down 0.7%, and South Korea’s Kospi fell 0.8%. Nonetheless, the Hang Seng in Hong Kong jumped 0.5% and the Shanghai Composite rose 0.4%.

In an effort to restore faith in the banking system, the Treasury Department, the Federal Reserve, and the FDIC said on Sunday that all Silicon Valley Bank customers will be safeguarded and able to access their funds. Also, they outlined measures designed to safeguard bank clients and avoid future bank runs.

“This action will guarantee that the U.S. banking system continues to execute its essential functions of preserving deposits and providing access to credit to individuals and companies in a way that fosters robust and sustainable economic development,” the agencies said in a joint statement.

On Monday, depositors at Silicon Valley Bank and Signature Bank will be allowed to retrieve their funds, including those whose holdings exceed the $250,000 insurance limit.

Meanwhile, on Sunday, First Republic Bank stated that it has secured access to funds from the Fed and JPMorgan Chase, therefore improving its financial health.

Also, the Fed unveiled late Sunday an enormous emergency lending program designed to forestall a wave of bank runs that would jeopardize the integrity of the banking system and the overall economy. Fed officials compared the scheme to what central banks have done for decades: lend freely to the banking sector so that clients have confidence that they can always access their accounts.

The lending facility will allow banks that need to obtain cash to pay depositors to borrow the necessary funds from the Fed rather than selling Treasuries or other assets. Silicon Valley Bank had to sell some of its Treasuries at a loss in order to cover client withdrawals. Banks can deposit these securities as security and borrow from the emergency facility under the new Fed scheme.

The Treasury has put aside $25 billion to compensate for any losses sustained by the Federal Reserve’s emergency lending facility. Fed officials stated, however, that they do not plan to spend any of that money, given the extremely low default risk of the assets pledged as collateral.

According to analysts, the Fed’s program should be sufficient to calm the financial markets on Monday.

“Monday will undoubtedly be a difficult day for many in the regional banking industry, but today’s move significantly lessens the likelihood of additional contagion,” economists from the investment firm Jefferies wrote in a research note.

Although being the most significant government involvement in the banking sector since the 2008 financial crisis, the moves taken on Sunday were quite modest in comparison to those taken 15 years earlier. The two failing banks themselves have not been rescued, nor have they received government funds.

President Joseph Biden stated as he boarded Air Force One to return to Washington on Sunday evening that he will discuss the banking crisis on Monday. Biden also stated in a statement that he was “firmly committed to bringing those responsible for this mistake accountable in full and to continuing our efforts to tighten monitoring and regulation of larger institutions so that we never find ourselves in this situation again.”

Friday, regulators were forced to shutter Silicon Valley Bank, a financial institution with more than $200 billion in assets, due to a conventional bank run in which depositors raced to take their money simultaneously. It is the second-largest bank collapse in U.S. history, behind only Washington Mutual in 2008.

Some major Silicon Valley entrepreneurs believed that if Washington did not intervene to save the failing bank, consumers would soon begin to flee to rival financial institutions. The stock values of other banks that cater to technology businesses, such as First Republic Bank and PacWest Bank, have plummeted in recent days.

Among the bank’s customers are a variety of enterprises from California’s wine sector, where a number of wineries rely on Silicon Valley Bank for loans, as well as climate-focused technology startups. Sunrun, a company that sells and rents solar energy equipment, deposited less than $80 million with Silicon Valley. The clothes e-commerce company Stitchfix reported recently that it has a $100 million credit line with Silicon Valley Bank and other lenders.

Tiffany Dufu, founder and chief executive officer of The Cru, a New York-based career coaching platform and network for women, recorded a video on LinkedIn on Sunday from the restroom of an airport, stating that the financial crisis was testing her resilience. Due to the fact that her funds were locked up at Silicon Valley Bank, she was had to pay her staff from her personal account. With two college-bound adolescents to support, she was glad to learn that the government intends to reimburse depositors in full.

“Small firms and early-stage startups don’t have a lot of access to leverage in a scenario like this, and we’re frequently in a very vulnerable position, especially when we have to battle so hard to get the wires into your bank account, to begin with,” Dufu told The Associated Press.

Silicon Valley Bank began its descent into insolvency when its clients, who were primarily technological businesses unable to obtain finance, began withdrawing their deposits. To cover the withdrawals, the bank was forced to sell bonds at a loss, resulting in the greatest failure of a U.S. financial institution since the height of the financial crisis.

Treasury Secretary Janet Yellen cited the Federal Reserve’s decision to raise interest rates to combat inflation as Silicon Valley Bank’s primary concern. When interest rates rose, several of its assets, such as bonds and mortgage-backed securities, lost market value.

Sheila Bair, who was head of the FDIC during the 2008 financial crisis, said that “we sold a bankrupt bank to a strong bank in practically every instance.” And often, a healthy purchaser would also cover the uninsured since they desired the franchise value of those significant depositors. This is the greatest possible outcome.”

But with Silicon Valley Bank, she stated on NBC’s “Meet the Press,” “This was a liquidity crisis, a bank run, so they had no time to plan to promote the bank. So, they must do this immediately and play catch-up.”

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