HSBC takes control of UK arm of failed US bank
US authorities unveiled sweeping measures on Sunday to ease fears over the health of the banking system following the failure of Silicon Valley Bank (SVB), as regulators took over a second troubled lender. Regulators stepped in to ensure depositors still had access to their funds at SVB and promised other institutions help in meeting customers' needs after markets were rattled by the bank's sudden collapse. In Britain, banking giant HSBC bought SVB's UK division for just £1 in a rescue deal overseen by the Bank of England and the government. Amid fears over the wider sector, US President Joe Biden vowed to hold "fully accountable" the people responsible for "this mess" and said he would deliver remarks on Monday morning on maintaining a resilient banking system. "The American people and American businesses can have confidence that their bank deposits will be there when they need them," Biden said. In a joint statement, financial agencies including the US Treasury said SVB depositors would have access to "all of their money" starting Monday, and that American taxpayers will not have to foot the bill. The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and Treasury added that depositors in Signature Bank, a New York-based regional-size lender with significant cryptocurrency exposure which was shuttered on Sunday after its stock price tanked, would also be "made whole." The Fed also announced it would make extra funding available to banks to help them meet the needs of depositors, which would include withdrawals. "We are taking decisive actions to protect the US economy by strengthening public confidence in our banking system," the statement said. "The US banking system remains resilient and on a solid foundation," due in large part to reforms and banking industry safeguards undertaken after the financial crisis of 2008, they added. "Those reforms combined with today's actions demonstrate our commitment to take the necessary steps to ensure that depositors' savings remain safe." The FDIC move guarantees deposits, but only up to US$250,000 per client and per bank. Regulators on Friday took control of SVB, a key lender to start-ups across the US since the 1980s, after a huge run on deposits left the medium-sized bank unable to stay afloat on its own. Hours before Sunday's joint statement, Treasury Secretary Janet Yellen said the government wants to avoid financial "contagion" from the SVB implosion, as it ruled out a bailout. She told CBS that the US government wanted "to make sure that the troubles that exist at one bank don't create contagion to others that are sound." (AFP)