XPost: talk.politics.guns, alt.politics.democrats, alt.politics.economics   
   XPost: sac.politics   
   From: crooks@deepstate.gov   
      
   WASHINGTON (AP) — Treasury Secretary Janet Yellen offered firm, upbeat   
   reassurances to rattled bank depositors and investors Thursday, even as   
   American financial institutions and European agencies ordered fresh rescue   
   efforts following the second-largest bank collapse in U.S. history.   
      
   Questioned closely, sometimes aggressively, Yellen told senators at a   
   Capitol hearing that the U.S. banking system “remains sound” and Americans   
   “can feel confident” about the safety of their deposits.   
      
   Her remarks, against the backdrop of deepening concerns about the health   
   of the global financial system, were an effort to signal to markets that   
   there would be no broader contagion from the collapse of Silicon Valley   
   Bank in California and Signature Bank in New York.   
      
   By the time her testimony was over, another major institution, First   
   Republic Bank, received an emergency infusion of $30 billion in deposits   
   from 11 banks, according to Treasury. And in Europe hours earlier, Credit   
   Suisse, Switzerland’s second-largest lender, got a promise from the Swiss   
   central bank of a loan of up to 50 billion francs ($54 billion).   
      
   Wall Street rallied on the rescue news.   
      
   Republican senators laid a big part of the blame for the problems on   
   Democratic President Joe Biden’s administration.   
      
   “The reckless tax and spend agenda that was forced through Congress”   
   contributed to record high inflation that the Federal Reserve is having to   
   compensate for through increasing interest rates, said Sen. Mike Crapo of   
   Idaho. And those surging rates have caused banks — as well as regular   
   citizens — problems.   
      
   The Republicans also questioned Biden’s assurances that taxpayers won’t   
   bear the brunt of the commitment to make depositors whole.   
      
   Yellen resisted that scenario, though she said, “We certainly need to   
   analyze carefully what happened to trigger these bank failures and examine   
   our rules and supervision” to prevent them from happening again. She   
   defended the government’s argument that taxpayers will not end up paying   
   the cost of protecting uninsured money at Silicon Valley and Signature.   
      
   The Treasury secretary was the first administration official to face   
   lawmakers over the decision to protect uninsured money at the two failed   
   regional banks, a move some have criticized as a bank “bailout.”   
      
   “The government took decisive and forceful actions to strengthen public   
   confidence” in the U.S. banking system, Yellen testified. “I can reassure   
   the members of the committee that our banking system remains sound, and   
   that Americans can feel confident that their deposits will be there when   
   they need them.”   
      
   The week has been a whirlwind for markets globally on worries about banks   
   that may be bending under the weight of the fastest hikes to interest   
   rates in decades, increasures intended to quell rising inflation on   
   consumer goods.   
      
   In less than a week, Silicon Valley Bank, based in Santa Clara,   
   California, failed after depositors rushed to withdraw money amid anxiety   
   over the bank’s health. Then, regulators convened over the weekend and   
   announced that New York-based Signature Bank also failed. They said that   
   all depositors, including those holding uninsured funds exceeding   
   $250,000, would be protected by federal deposit insurance.   
      
   The Justice Department and the Securities and Exchange Commission have   
   since launched investigations into the Silicon Valley Bank collapse, and   
   President Joe Biden has called on Congress to strengthen rules on regional   
   banks.   
      
   White House press secretary Karine Jean-Pierre said Thursday, “There are   
   things that we can do in the administration, but in order to really deal   
   with this issue we have to act. Congress needs to act.”   
      
   Thursday’s hearing, originally scheduled to address Biden’s budget proposa   
   for the fiscal year beginning next October, came after the sudden collapse   
   of Silicon Valley, the nation’s 16th-biggest bank and a go-to financial   
   institution for tech entrepreneurs. While lawmakers questioned Yellen on   
   the federal deficit and upcoming debt ceiling negotiations, many focused   
   instead on the bank failures and who was to blame.   
      
   The Biden administration’s “handling of the economy contributed to this,”   
   insisted Sen. Tim Scott, R-S.C. “I plan to hold the regulators   
   accountable.”   
      
   Sen. Mark Warner, D-Va., asked, “Where were the regulators in all of   
   this?”   
      
   “Nerves are certainly frayed at this moment,” said Sen. Ron Wyden, D-Ore.,   
   who chairs the committee. “One of the most important steps the Congress   
   can take now is make sure there are no questions about the full faith and   
   credit of the United States,” he said, referring to raising the federal   
   debt ceiling.   
      
   Sen. Mike Crapo of Idaho, the committee’s top Republican, said, “I’m   
   concerned about the precedent of guaranteeing all deposits,” calling the   
   federal rescue action a “moral hazard.”   
      
   Yellen said on CBS’ “Face the Nation” last Sunday that a banks bailout was   
   not on the table.   
      
   “We’re not going to do that again,” she said, referring to the   
   government’s response to the 2008 financial crisis, which led to massive   
   government rescues for large U.S. banks.   
      
   Yellen, a former Federal Reserve chair and past president of the San   
   Francisco Federal Reserve during the 2008 financial crisis, was a leading   
   figure in the resolution this past weekend, which was engineered to   
   prevent a wider systemic banking problem.   
      
   “This week’s actions demonstrate our resolute commitment to ensure that   
   depositors’ savings remain safe,” she said.   
      
   Sen. Sherrod Brown, D-Ohio, compared the banks’ collapse to rail industry   
   deregulation lobbying that Democrats say contributed to the East Palestine   
   train derailment that rocked an Ohio community. “We see aggressive   
   lobbying like this from banks as well,” he said.   
      
   In Europe, troubles at Credit Suisse deepened concerns about the global   
   financial system.   
      
   The Swiss giant was having issues long before the U.S. banks collapsed,   
   but the news Wednesday that the bank’s biggest shareholder would not   
   inject more money led shares of European banks to plunge. On Thursday,   
   they rose after the Swiss Central Bank’s action.   
      
   Regulators in the U.S. and abroad are trying to reassure depositors that   
   their money is safe. They “don’t want anybody to be the person who sits in   
   a darkened room or darkened cinema and shouts fire, because that’s what   
   prompts a rush for the exits,” said Russ Mould, investment director at the   
   online investment platform AJ Bell.   
      
   Despite the banking turmoil, the European Central Bank hiked interest   
   rates by a half percentage point in its latest effort to curb stubbornly   
   high inflation, saying Europe’s banking sector is “resilient,” with strong   
   finances and plenty of available cash.   
      
   ECB President Christine Lagarde said the central bank would provide   
   additional support to the banking system if necessary. She said banks “are   
      
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