The US Treasury Department is considering options to insure all deposits if the banking crisis gets worse, which may require funds from the Exchange Stabilization Fund, since any other means of emergency funding must be approved by the Congress, Bloomberg reported on Tuesday, citing sources with knowledge of the talks
MOSCOW (Pakistan Point News / Sputnik - 21st March, 2023) The US Treasury Department is considering options to insure all deposits if the banking crisis gets worse, which may require funds from the Exchange Stabilization Fund, since any other means of emergency funding must be approved by the Congress, Bloomberg reported on Tuesday, citing sources with knowledge of the talks.
The US Treasury Department is reviewing whether federal regulators have sufficient emergency authority to insure deposits that exceed the current $250,000 limit for most accounts without approval from the US Congress, the sources told the news outlet.
At the same time, the US authorities do not yet view such a move as necessary, but nevertheless are developing a strategy in case the banking crisis worsens, Bloomberg reported.
The Exchange Stabilization Fund, created in the 1930s, has been used as a backstop for emergency lending facilities by the Federal Reserve System under full authority of the US Treasury Department, the report said.
On March 10, Californian regulators shut down Silicon Valley Bank (SVB), which became the largest US bank to collapse since the 2008 financial crisis. All insured deposits have been transferred from SVB to a separate structure, Deposit Insurance National Bank of Santa Clara. In addition, authorities closed New York-based Signature Bank because of systemic risks. This was the third-largest bank failure in US history.
