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US weighs new fund to backstop deposits if more banks fail, Bloomberg News says

Published Mar 11, 2023 08:22PM ET Updated Mar 12, 2023 05:00AM ET
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© Reuters. FILE PHOTO: The U.S. Federal Reserve building is pictured in Washington, March 18, 2008. REUTERS/Jason Reed

(Reuters) - The U.S. Federal Reserve and the Federal Deposit Insurance Corp are weighing the creation of a fund that would allow regulators to backstop more deposits at banks that run into trouble in the wake of Silicon Valley Bank's collapse, Bloomberg News reported on Saturday.

Regulators discussed the new special vehicle in conversations with banking executives and hope such a measure would reassure depositors and help contain any panic, the report said, citing people familiar with the matter.

The new vehicle is part of the agency's contingency planning as panic spreads about the health of banks focused on the venture capital and startup communities, the report added.

The U.S. Federal Reserve declined to comment on the report, while FDIC did not immediately respond to a Reuters request for comment.

Earlier on Saturday, U.S. President Joe Biden spoke with California Governor Gavin Newsom about the SVB failure and the efforts to address the situation.

Silicon Valley Bank imploded after depositors, concerned about the lender's financial health, rushed to withdraw their deposits. The frenetic two-day run on the bank blindsided observers and stunned markets, wiping out more than $100 billion in market value for U.S. banks.

US weighs new fund to backstop deposits if more banks fail, Bloomberg News says
 

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Comments (11)
Brad Albright
Brad Albright Mar 12, 2023 8:13AM ET
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Such a fund will be created, and its beneficiaries will insist they are against socialism.
ji ll
ji ll Mar 12, 2023 5:35AM ET
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result of stupid zero rate policy
Benjamin USA
Benjamin USA Mar 12, 2023 5:18AM ET
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Never should have hsppened. Fed is asleep at the wheel again.
Jan Buyle
Jan Buyle Mar 12, 2023 1:29AM ET
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Seems to me that the only safe haven for the next decade will (again) be gold and silver...
jason xx
jason xx Mar 12, 2023 1:29AM ET
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Ya paper gold is def safe
Dr Heyliger
Dr Heyliger Mar 12, 2023 12:01AM ET
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QE FOREVER!!!!
William Smith
William Smith Mar 11, 2023 10:40PM ET
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New Fund. Funded with non existent printed money, which is highly inflationary. It's a dead end street to collapse and ruin.
Scrubb White
Scrubb White Mar 11, 2023 10:14PM ET
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Crypto influences.
Tom Saltzman
Tom Saltzman Mar 11, 2023 9:52PM ET
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Proving once again that we no longer have Capitalism.
Daji Wang
Daji Wang Mar 11, 2023 9:35PM ET
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bearish or bullish?
Tom Troung
Tom Troung Mar 11, 2023 9:27PM ET
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the gov has reached Deb ceiling limit, how to backstop banks now? printing more money and do rate hikes to fight inflation? man... what is it?
 
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