Next steps could have ripple effects through the financial system
Bank regulators were racing over the weekend to sort out Friday’s stunningly hasty collapse of Silicon Valley Bank and are facing high stakes as they try to shield the banking system from wider fallout.
A plan that soothes nerves about access to uninsured deposits—most of the bank’s deposits are sizable enough that they don’t carry Federal Deposit Insurance Corp. protection—could tamp down the crisis and limit any impact on the economy as the Federal Reserve focuses on combating inflation by raising interest rates.
But failing to swiftly clarify how SVB’s customers can access funds, make payroll and conduct business risks broader economic consequences and threatens to complicate the Fed’s monetary policy decisions.
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