SAN FRANCISCO (KCBS RADIO) – The collapse of Silicon Valley Bank last week has rocked the financial world.
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People who have accounts with the bank will be able to access their funds starting Monday, in a bold move by the Federal Reserve and the United States Department of the Treasury, according to Jill Schlesinger, CBS News Senior Business Analyst.
"Everyone who puts money in a bank knows they get FDIC protection, if you’re dealing with an FDIC-insured institution up to $250,000 in an account," she told KCBS Radio Monday morning.
But according to its own records, Silicon Valley Bank had about $150 billion in deposits that were over the $250,000 level.
On Sunday, the Federal Reserve unveiled two measures intended to help mitigate the situation. One essentially assured depositors at Silicon Valley Bank or Signature Bank, which also failed in recent days, that they would get their money.
"That was a big sigh of relief, especially for a lot of the smaller companies who bank with these institutions," said Schlesinger.
The second move by the Federal Reserve was to announce its intention to open up a facility to help other banks experiencing a liquidity crisis.
The hope to prevent any other bank from having this kind of run on its deposits.
"They're going to just basically do a swap, they're going to say 'You at the bank, give us the bonds that you hold, we’ll give you cash for those bonds, you don’t have to sell those bonds on the open market and take a loss,'" she said.
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