In an interview with Margaret Brennan on the CBS News’ “Face the Nation” today, Treasury Secretary Janet Yellen did more “bobbing and weaving” than Muhammad Ali in her responses to questions regarding the failure of Silicon Valley Bank (SVB). Here are selected quotes from the transcript:
MARGARET BRENNAN: I want to get straight to it because the markets will soon reopen for trading. Does the government need to intervene and take emergency measures because of SVB’s failure?
JANET YELLEN: Well, let me say America’s economy relies on a safe and sound banking system that can provide for the credit needs of our households and businesses. So whenever a bank, especially one, like Silicon Valley Bank with billions of dollars in deposits fails, it’s clearly a concern. From the standpoint of depositors, many of which may be small businesses, they rely on access to their funds, to be able to pay the bills that they have, and they employ tens of thousands of people across the country. We’ve been hearing from those depositors and other concerned people this weekend. So let me say that I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation. I can’t really provide further details at this time.
BRENNAN: For those depositors, about 85% of SVB’s accounts were uninsured. And, as you were saying, a lot of different tech firms relied on them. Do you believe that depositors should be paid back in full? Will they?
YELLEN: Look, I’m not going to comment on the details of the situation at this point. I simply want to say that we’re very aware of the problems that depositors will have, many of them are small businesses that employ people across the country.
BRENNAN: Now, I know you know this region of the country so well, because you served at the San Francisco Fed years ago. The tech sector has already been suffering from layoffs, it’s already under pressure, and this is really the hub of American innovation. How severe will the consequences be for that innovation?
YELLEN: So, I really can’t comment on what the impact will be. I think it depends on how this situation is resolved. And that’s something that we’re working on.
