• The U.S. banking system remains sound and Americans can feel confident that their deposits are safe, Treasury Secretary Janet Yellen said on Thursday, but she denied that emergency actions after two large bank failures mean that a blanket government guarantee now existed for all deposits.
• “A bank only gets that treatment,” she told U.S. Republican Senator James Lankford, if supermajorities of the boards of the Federal Reserve, the Federal Deposit Insurance Corp and “I, in consultation with the president, determine that the failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences.”
• Her comment was the first explicit indication of regulators’ views about the limits of the weekend’s extraordinary guarantee that ensured that tens of billions in uninsured deposits at Silicon Valley and Signature were not lost.