Yellen responded to a question from Rep. David Schweikert, Republican of Arizona, during a hearing of the House Finance Committee on Friday.
There are recent developments affecting some banks that I am watching very closely. When banks suffer financial losses, it is a cause for concern
Yellen said at her committee hearing when asked about the situation surrounding Silicon Valley Bank.
This afternoon, CNBC already wrote about the possibility of selling SVB Financial, the parent company of Silicon Valley Bank, after their stock offering failed. According to the newspaper, SVB is negotiating the sale of the company, after the bank’s attempts to raise capital failed, and several financial institutions are investigating the possible purchase of SVB.
SVB announced the share issue when its customers started withdrawing their deposits. The lender essentially had to liquidate all of the salable securities in its portfolio in order to make the payments, which the bank It cost 2 billion dollars. As a result, the bank has updated its forecast for this year, in which it expects a sharper decrease in net interest income. The situation is only worsened by the fact that several well-known venture capital investment companies advised their corporate clients to withdraw their money from the bank as a precaution. The problems seen at SVB also affected the American banking system as a whole, we wrote about this in more detail in this article:
Cover photo: Drew Angerer/Getty Images
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