WASHINGTON (Reuters) – New policies adopted on Sunday by U.S. banking regulators will “wipe out” equity and bondholders in Silicon Valley Bank and Signature Bank of New York while protecting all customer deposits, a senior U.S. Treasury official said.
The official said the steps were taken to stabilize the financial system and protect depositors, and did not constitute a bailout of either firm. No losses of either bank will be borne by U.S. taxpayers, the official said.
Together with the Federal Reserve’s decision to make funds available to eligible financial institutions and ensure they can meet the needs of all their depositors, the steps would “restore market confidence,” the official said.
(Reporting by Andrea Shalal and Pete Schroeder; Editing by Leslie Adler)
