Several people are concerned about Silicon Valley Bank and Signature Bank’s closure. Deposit accounts are insured up to a total of $250,000 for each person, each bank, and each type of account.
The Federal Deposit Insurance Corporation protects various deposit accounts, providing insurance to almost all institutions. It provides $250,000 in coverage for each account ownership category, per depositor, per covered bank. This insurance covers checking, savings, and money market accounts, according to the cnbc.com post.
The Government Wants to Prevent Bank Runs
There is no reason to panic and take money insured out of banks because the FDIC covers most of them. The federal government has gone further to allay concerns by ensuring that depositors at the recently bankrupt banks would have complete access to their deposits.
While the collapse has caused alarm among many, the Biden administration has pledged to reestablish trust in the nation’s banking system. They guarantee that starting Monday, all Silicon Valley Bank customers will have access to all their money.
The government’s goal is to stop bank runs so businesses with a lot of money in the bank may keep running without worrying about paying their employees. All bank deposits, including those that aren’t insured, will be guaranteed safe under the assurance.
The US Justice Department and Securities and Exchange Commission launched an investigation following the failure of Silicon Valley Bank. They will investigate the bank’s loss and the senior executives’ conduct that contributed to its closure last week. No one has been charged as of yet in connection with the present collapse.
Despite the government’s statements, the collapse’s tremors continued to shake markets worldwide. Yet, as bank stocks recovered on Tuesday, US stocks rose. Although the crisis may be ended, the economy and bank sector are still quite fragile.