US Treasury head says agency 'prepared to take additional actions' amid banking crisis

By Ovunc Kutlu

ISTANBUL (AA) - US Treasury Secretary Janet Yellen said Thursday the agency is "prepared to take additional actions if warranted" amid the banking crisis that sweeps the nation in recent weeks.

"Our top priority is to protect the health of the U.S. economy. Two weeks ago, we learned of problems at two banks that could have had significant impacts on the broader banking system and the American economy," she said before the House Financial Services and General Government Appropriations Committee.

"We took actions to protect all depositors at the two failed institutions and provide additional liquidity for banks. This was designed to mitigate risks to the banking system," she added.

Within a couple of weeks, Silvergate Bank, Silicon Valley Bank (SVB), Signature Bank, and First Republic Bank have gone under in the US, causing panic for Wall Street and investors, but especially for depositors.

Yellen stressed that shareholders and debtholders of the failed banks "are not being protected" by the US government, but noted that no losses from the resolution of these banks will be borne by American taxpayers.

She said the protection of the depositors in the banks is provided by the Deposit Insurance Fund, which is funded by fees on insured banks.

The Treasury head said the agency has used "tools to act quickly to prevent contagion" and it is ready to use those again.

"The strong actions we have taken ensure that Americans’ deposits are safe," she said.