U.S. Treasury Secretary Janet Yellen on Tuesday said contagious bank runs were confronting the American financial system.
She contrasted those recent events with the 2008 financial meltdown, which she characterized as a solvency crisis. Yellen said that the banking system was still “sound,” and that it was “stabilizing” after two banks—Silicon Valley Bank and Signature Bank—collapsed in the last two weeks.
Several major banks had to prop up a third bank, First Republic Bank, with $30 billion in deposits to prevent it from collapsing.
Do we know what might come next? Yellen said other banks may need help from the government in the future, but it remains uncertain whether other banks will face bank runs. She has also said that American depositors can have confidence that their money is secure.
This story originally appeared in WORLD. © 2023, reprinted with permission. All rights reserved.