Yellen says bank situation ‘stabilizing,’ system is ‘sound’

Treasury Secretary Janet Yellen is trying to project calm after regional bank failures, saying the U.S. banking system is “sound” but additional rescue arrangements “could be warranted” if any new failures at smaller institutions pose a risk to financial stability, according to an Associated Press report.

Yellen, who made her remarks at the American Bankers Association on Tuesday, says that overall “the situation is stabilizing. And the U.S. banking system remains sound.”

Yellen’s remarks come after a series of troubling bank developments this month.

Silicon Valley Bank, based in Santa Clara, California, failed on March 10 after depositors rushed to withdraw money amid anxiety over the bank’s health. It was the second-largest bank collapse in U.S. history. Regulators convened over the following weekend and announced that New York-based Signature Bank also had failed. They said that all depositors at both banks, including those holding uninsured funds, those exceeding $250,000, would be protected by federal deposit insurance.

Last week a third bank, San Francisco-based First Republic Bank, was fortified by $30 billion in funds raised by 11 of the biggest U.S. banks in an attempt to prevent it from collapsing.