Stocks rebound as Yellen testifies on banks
Treasury Secretary Janet Yellen will tell America's top banking lobby Tuesday that the government has a playbook if other financial institutions, like Silicon Valley Bank, collapse and pose a risk to banking sector.
In a speech to the American Bankers Association, Yellen discusses the government's emergency rescue of SVB and Signature Bank's depositors — and says similar action could be taken in the event of a bank run.
"The steps we took were not focused on aiding specific banks or classes of banks," Yellen said. "Our intervention was necessary to protect the broader U.S. banking system. And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion."
The collapse of Silicon Valley Bank sent a shockwave across the global financial system earlier this month. And fears about the stability of midsize U.S. banks have shaken the banking sector.
First Republic Bank continues to struggle as it works to convince investors it is viable.
Last week, the nation's top 11 banks injected $30 billion of liquidity to shore up troubled First Republic.
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