SAN FRANCISCO (KCBS RADIO) – The collapse of Silicon Valley Bank last week has the financial world in a panic and people confused.
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The Federal Reserve and the U.S. Department of the Treasury announced a couple of measures on Sunday designed to help mitigate the fallout.
"It became apparent that President Biden was doing what a president should do," said Rep. John Garamendi of Contra Costa and Solano counties, who was briefed by the FDIC and the Treasury Department over the weekend on KCBS Radio's "Ask an Expert" with Eric Thomas and Margie Shafer on Monday.
"He was taking bold, decisive action to stabilize the banking industry in the United States," he said.
The program that Biden put together will ensure that every depositor with Silicon Valley Bank will have access to their money.
Other banks and venture capitalist firms had a lot to be worried about after the collapse last week.
"A lot of businesses, individuals, throughout the Bay Area were banking with the Silicon Valley Bank were very concerned – they want to know what’s going to happen," said Garamendi.
Although the money is protected by the FDIC, especially for amounts less than $250,000, people still made a run on the bank when things went awry.
"There are still elements in certain parts of the banking sector where large amounts of deposits are not insured by the FDIC," said Professor Hersh Shefrin, Chair of the Santa Clara University Finance Department in the Levy school of Business, also on "Ask an Expert" on Monday.
"Vulnerability remains for banks of that sort," he said. "Silicon Valley Bank happened to be a bank that fell into that category."
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