Is the banking system in peril?

The Biden administration has taken extraordinary actions following the collapse of Silicon Valley Bank

An illustrated image of a line outside SVB and collapsing columns
(Image credit: Illustrated/Getty Images)

The federal government is scrambling to restore confidence in the financial system following the collapse of Silicon Valley Bank, the second biggest failure of a federally insured bank in U.S. history. The lender, which had $209 billion in assets at the end of December, went under after news of its money troubles sparked a run on deposits last week. A second institution, Signature Bank of New York, which had significant cryptocurrency deposits, failed on Sunday, spreading anxiety about the health of the financial system.

The Treasury Department and the Federal Deposit Insurance Corporation stepped in, taking control of both banks and promising that the government would backstop depositors, ensuring that they'd be able to get their money — not just the $250,000 insured under federal law. Many tech startups deposited investments from venture capital firms at SVB, and the Biden administration said its extraordinary actions were intended not to protect bank shareholders, but to make sure tech employees would get paid and head off a wider "systemic" meltdown.

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Harold Maass, The Week US

Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.