British tech firms caught up in bank collapse could be bailed out, PM says

Treasury 'working at speed' to ensure cash flow for bank's customers

Telegraph 12 March 2023  

Englund: Summers “I don’t think this is a time for moral-hazard lectures” Silicon Valley Bank (englundmacro.blogspot.com)

F.D.I.C. could find a way to pay back depositors.

While the regulator is typically required to unravel failed banks in the cheapest way possible — which means leaving the private sector on the hook for losses on uninsured deposits — it can get around that using what is called a “systemic risk exception.”

The rule, which was used repeatedly during the 2008 crisis, essentially allows the government to pay back uninsured depositors if failing to do so would have serious adverse consequences for the economy or financial stability.

But invoking the exception requires jumping a number of hurdles: The Treasury secretary, in consultation with the president, the F.D.I.C., and the Federal Reserve Board, must sign off on the decision to use it.

NYT 12 March 2023

https://www.nytimes.com/2023/03/12/business/janet-yellen-silicon-valley-bank.html

Senate Bill Temporarily Restores Treasury, FDIC Guarantee Authority Eliminated Post-GFC

March 27, 2020

https://som.yale.edu/blog/senate-bill-temporarily-restores-treasury-fdic-guarantee-authority-eliminated-post-gfc

The Federal Deposit Insurance Corporation (FDIC) 

https://www.fdic.gov/