Top economist Mohamed El-Erian says unlimited deposit guarantee will be hard to reverse after SVB fallout: ‘We are now in a different world’

Silicon Valley Bank’s crisis and subsequent closure has rocked financial markets since late last week. In a bid to protect depositors and investors, federal regulators announced Sunday that they would “address any liquidity pressures that may arise.” 

Many people have described the emergency measures as a bailout and say that they mark a major shift in how the federal government deals with banking crises. Until now, only deposits up to $250,000 were insured under federal law. But the Sunday decision by regulators will protect all deposits made at SVB and crypto-heavy Signature Bank, which regulators wound down on Sunday, to avoid “systemic risk.”

Prarthana Prakash | Fortune.com

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