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U.S. Treasury Secretary Janet Yellen on Friday convened U.S. financial authorities to discuss the closure of Silicon Valley Bank, and expressed “full confidence” banking regulators would act appropriately.
Earlier Friday, the Federal Deposit Insurance Corporation said that the bank had been closed by the California Department of Financial Protection and Innovation.
Read: Silicon Valley Bank branches closed down by regulator with FDIC named receiver
The Treasury Department said in a statement that Yellen noted “the banking system remains resilient and regulators have effective tools to address this type of event.”
The closure came amid a crisis at parent SVB Financial Corp.
SIVB,
which lost a record 60% of its value on Thursday.
The bank’s failure is the second biggest in U.S. history.
The secretary met with leaders from the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency.
Separately, speaking to reporters at the White House, Cecilia Rouse, who chairs President Joe Biden’s Council of Economic Advisers, said she had confidence in the banking system.
“Our banking system is in a fundamentally different place than it was a decade ago,” Rouse said during a White House press briefing. She said reforms that “were put into place back then really provide the kind of resilience that we’d like to see, so we have every faith in our regulators.”
The bank’s closure was also drawing attention on Capitol Hill, as a spokeswoman for the Republican-led House Financial Services Committee told MarketWatch that members are in touch with regulators and are closely monitoring the situation.
Sen. Sherrod Brown, the Ohio Democrat who heads the Senate Banking Committee, is “monitoring the situation closely,” a spokeswoman said Friday.
“The FDIC and other banking regulators are on the job to protect insured depositors and our banking system,” she added.
Victor Reklaitis contributed to this story.
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