To minimize risk to the financial system and reinforce confidence in the banking system, the Federal Reserve, Department of Treasury and FDIC announced all deposit accounts at SVB and Signature Bank are insured (accounts above the $250,000 FDIC guarantee ceiling). Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks. In theory, taxpayers aren’t on the hook. Essentially the program and government actions are designed to mitigate banks’ balance sheet risk and prevent contagion.
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