Yellen: We are ready to intervene to protect small banks

US Treasury Secretary Janet Yellen said the situation in the banking system has “stabilized” and that the steps they have taken have reduced the risk of bankruptcy in other banks. Yellen has given the message that the US government can take strong action if necessary. Yellen, who is expected to speak at the American Bankers Association in Washington, will reiterate her statement that the government will take the necessary actions to protect depositors if the crisis threatens small banks. According to the previously released speech, Yellen noted that the government’s recent actions show its determination to take the necessary steps to ensure that depositors’ savings and the banking system remain safe. Yellen said, “Our intervention was aimed at protecting the US banking system. If there is a risk of deposit outflows from small banks, the government may take similar steps.” US officials have taken extraordinary steps to establish confidence following the bankruptcies of Silicon Valley Bank and Signature Bank. Following the steps to curb deposit outflows from banks, Treasury Department officials announced that stability has begun to be achieved in medium and small-sized banks. "The situation is stabilizing and the U.S. banking system remains robust. The Fed facility and discount window loans are performing as intended to provide liquidity to the banking system. Mass deposit outflows from regional banks have stabilized," Yellen said. She emphasized that a safe and sound banking system is integral to the health of the U.S. economy and that they will continue to be cautious.