In a rare sign of consensus, congressmen from both parties said Sunday they would oppose any possible bailout options for the Silicon Valley bank, which collapsed on Friday in the biggest bank meltdown since the 2008 financial crisis.
Treasury Secretary Janet Yellen ruled out a bailout option for the bank’s owners and investors, and congressmen on both sides of the aisle said it wasn’t the right move to deal with the second-biggest banking meltdown in country history.
“Let me be clear, during the financial crisis, investors and owners of systemic big banks were bailed out… and the reforms that have been enacted mean we will not do that again,” Yellen told CBS’s Face The Nation.
Regulators shut down the bank on Friday over concerns about its solvency as customers withdrew their funds. Federal officials are reportedly looking at ways to secure uninsured bank deposits to avoid a panic in the hours leading up to the opening of the first markets in Asia, The Washington Post reported.
Democratic Sen. Bob Menendez (NJ) said on NBC’s “Meet the Press” that he was “not ready” to offer a bailout to the Silicon Valley bank, “no way.”
“We need to see exactly everything that’s relevant to the specific circumstances and see what else is there — if there’s anything else — that we should be thinking about,” Menendez said.
Republican Rep. Nancy Mace (SC) stressed on CNN’s State of the Union that she would not support a bailout “at this time.”
“You know, we can’t continue to bail out private companies because there are no consequences for their actions. People who make mistakes or break the law must be held accountable in this country,” Mace said.
“It’s still very early. I don’t even think it’s been 48 hours. But I wouldn’t support a bailout at this point,” the congresswoman said.
Former Speaker Nancy Pelosi (D-Calif.) allegedly said at an SXSW panel that she doesn’t think “there’s an appetite in this country to bail out a bank” and instead hopes another bank will buy her.
The Wall Street Journal reported Sunday that regulators were auctioning off the bank to repay depositors.
Voice Actor Kevin McCarthy (R-Calif.) called in Fox News’ Sunday Morning Futures that he believes a larger bank acquiring Silicon Valley Bank has “great potential” and is something the government is considering.
“Silicon Valley Bank has many assets. It is exactly where the capital is currently located. So it’s attractive for someone to want to buy it. It’s just a timeline of where to go next. And the administration has tools to deal with that,” McCarthy said.
pelosi allegedly said that there are several potential buyers but hasn’t identified them – and that she’s hoping to see a purchase by tomorrow morning. McCarthy said he hopes the government will make an announcement on the matter by tomorrow, before US markets open.
“I spoke to the administration, off [Federal Reserve Chair] Jay Powell and Janet Yellen. You have the tools to deal with the current situation. They know how serious this is and they are working to try and make an announcement before the markets open,” the government spokesman said. “And I’m confident that something can be announced today to move forward.”
The Hill has reached out to the White House for comment.
Rep. Michael McCaul (R-Texas), whose home state hosts the tech-heavy South by Southwest festival, told CBS Face the Nation he hoped the bank’s failure was “an isolated incident.”
Fox News’ Howard Kurtz calls the Dominion lawsuit a “major test of the first amendment.” GOP senator says lawmakers should “talk” about changing retirement age.
“We want to make sure this is an isolated event and not a systemic event that could affect things like 2008 when we bailed out the financial sector,” he said.
Sen. Mark Warner (D-Va.), meanwhile, said he was waiting to see if any decisions would be made Sunday before making a decision.
“There was a general feeling that those responsible, the bank’s shareholders, should lose their money,” Warner told ABC’s This Week. “Depositors were a different circumstance, but there are moral hazard questions. I have great confidence that the overall system is quite strong.”
Copyright 2023 Nextstar Media Inc. All rights reserved. This material may not be published, broadcast, transcribed or redistributed.