The federal government won’t bail out the failed Silicon Valley Bank, Treasury Secretary Janet Yellen said Sunday — after it emerged that the bank’s workers landed bonuses just hours before Friday’s collapse.
Depositors could now get back as little as 30% of their money during an anticipated run on the bank Monday morning, a report said Sunday.
Yellen, appearing on CBS’ “Face the Nation,” balked at the government rescuing the nation’s 16th-largest bank, as was done for hundreds of institutions during the financial crisis in 2008.
“During the financial crisis, there were investors and owners of systemic large banks that were bailed out,” Yellen said. “And the reforms that have been put in place means that we’re not going to do that again.”
Yellen still insisted that officials are “concerned about depositors and are focused on trying to meet their needs.”
Customers are widely expected to make a run on Silicon Valley Bank on Monday morning when cash covered by the Federal Deposit Insurance Corp. is supposed to be available.
“I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation,” Yellen said Sunday.
“I can’t really provide further details at this time.”
Silicon Valley Bank employees received their annual bonuses shortly before the bank was seized Friday, NBC News reported late Saturday.
The bank traditionally hands out bonuses for the prior year’s work on the second Friday in March, and the payments had been in the works for days, sources familiar with the matter told CNBC.
Follow The Post’s coverage of Silicon Valley Bank’s collapse
- Ex-Silicon Valley Bank CEO Greg Becker jets to Hawaii after collapse
- Goldman Sachs lost $200M in recent US banking chaos: report
- Kevin O’Leary grilled on why he kept money at SVB if management were ‘idiots’
It’s unclear how much cash was distributed, but NBC said the bonuses likely ranged from $14,000 each for associates to $140,000 apiece for managing directors, based on figures posted on the Glassdoor website.
In 2019, Bloomberg reported that Silicon Valley Bank employees were the highest-paid among any public bank in the US, raking in an average of $250,683 each in 2018.
Meanwhile, depositors “are being told they will receive 30% to 50% of their money on Monday,” Fox Business senior correspondent Charlie Gasparino tweeted Sunday, citing bankers with knowledge of the situation.
Gasparino, a Post columnist, added that bank customers will get “most of the rest over time if there is no solution ie complete @FDICgov coverage or sale.”
During an appearance on “Fox & Friends,” Gasparino called the bank’s failure “a warning sign of just how screwed up the plumbing in our banking system and our economy is.
“I mean, let’s mean rewind videotape a little bit here. You know, we’ve had years and years of printing money by the Federal Reserve. Way too much,” he said.
“Even when we were coming out of the pandemic, we had the Biden administration spending a lot of money. You know, you do stuff like that, you mess with the economy like that…you’re gonna have some, some stuff that happens.”