In a rare show of consensus, congressional lawmakers from both parties on Sunday said they would oppose any potential bailout options for Silicon Valley Bank, which collapsed on Friday in the largest bank failure since the 2008 financial crisis.
Treasury Secretary Janet Yellen ruled out a bailout possibility for the bank’s owners and investors, and members of Congress on both sides of the aisle piled on to say that wouldn’t be the right move to deal with the second-largest bank collapse in the country’s history.
“Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out… and the reforms that have been put in place means that we’re not going to do that again,” Yellen said in an interview with 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 for ways to safeguard uninsured bank deposits in an effort to avoid a panic in the hours before the first markets open in Asia, the Washington Post reported.
Democrat Sen. Robert Menendez (N.J.) said on NBC’s “Meet the Press” that he’s “not ready” to offer Silicon Valley Bank a bailout “by any stretch of the imagination.”
“We have to see exactly everything that is pertinent to the specific set of circumstances and to see what else is out there – if anything else is out there – that we should be thinking about,” Menendez said.
Republican Rep. Nancy Mace (S.C.) stressed on CNN’s “State of the Union” that she wouldn’t support a bailout “at this time.”
“You know, we cannot keep bailing out private companies, because there’s no consequences to their actions. People, when they make mistakes or break the law, have to be held accountable in this country,” Mace said.
“It’s still very early. I don’t even think it’s been 48 hours. But at this time, I would not support a bailout,” the congresswoman said.
Former House Speaker Nancy Pelosi (D-Calif.) reportedly said at a SXSW panel that she doesn’t think “there’s any appetite in this country for bailing out a bank” and that she hopes instead for another bank to buy it.
The Wall Street Journal reported Sunday that regulators were auctioning the bank in an effort to pay back depositors.
House Speaker Kevin McCarthy (R-Calif.) said on Fox News’s “Sunday Morning Futures” that he thinks a larger bank acquiring Silicon Valley Bank is a “great potential” and something the administration was considering.
“Silicon Valley Bank has a lot of assets. It’s just where the capital is currently at. So it is attractive for someone to want to purchase it. It’s just a timeline of where to move forward. And the administration has tools to deal with this,” McCarthy said.
Pelosi reportedly said that there are several potential buyers, but did not identify them — and that she hopes to see a buy by tomorrow morning. McCarthy said he hopes the administration makes an announcement on the matter by tomorrow before U.S. markets open.
“I have talked with the administration, from [Federal Reserve Chair]Jay Powell and Janet Yellen. They do have the tools to handle the current situation. They do know the seriousness of this, and they are working to try to come forward with some announcement before the markets open,” the Speaker said of the administration. “And I’m hopeful 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, said on CBS “Face the Nation” he hopes the bank’s failure was “an isolated event.”
“We want to make sure this is- this is an isolated event, and not a systemic event that could impact things like in 2008 when we did bailout the financial sector,” he said.
Sen. Mark Warner (D-Va.) meanwhile said he was waiting to see what, if any decisions were made on Sunday before deciding
“There’s generally been a feeling that, you know, the people responsible, the shareholders of the bank ought to lose their money,” Warner said on ABC “This Week.” “Depositors have been a different circumstance, but there are questions around moral hazard. I’ve got a lot of faith that the overall system is quite strong.”
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