The US Treasury, FDIC and Federal Reserve will guarantee all deposits at SVB, Signature Bank, in an unprecedented move

A joint declaration ensured that all customer deposits with the respective banks are honored by the federal government.

The US Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) announced on Sunday that they will take “decisive action” to increase public confidence in the US banking system. That decision came after the FDIC and Federal Reserve recommended placing Silicon Valley Bank and Signature Bank under systemic risk exemptions. The move would allow the FDIC to wind down Silicon Valley Bank, based in Santa Clara, California, in a manner that would “fully protect” depositors’ money and ensure their access to credit. The same would apply to Signature Bank, based in New York, New York, which was shut down by its state founding board today.

In the joint statement, Treasury Secretary Janet L. Yellen, Federal Reserve Chairman Jerome H. Powell and FDIC Chairman Martin J. Gruenberg said, “This move will ensure that the U.S. banking system continues to perform its important role of protecting deposits.” and access to credit for households and businesses in ways that foster strong and sustainable economic growth.”

Management at both banks has been removed and shareholders and certain unsecured creditors will not be protected. However, depositors will have access to all of their money as of March 13 and taxpayers will not bear any losses. Any losses incurred in support of uninsured depositors will be reimbursed through a special deposit with the banks in accordance with the law.

The Federal Reserve Board also announced on Sunday that it would provide additional funding to eligible depository institutions to ensure banks are able to meet the needs of all of their depositors. “The US banking system remains resilient and is on solid foundations,” the statement said. “These reforms coupled with today’s actions demonstrate our commitment to taking the necessary steps to ensure depositor savings remain safe.”

The “determined action” to protect depositors’ savings is a welcome step; but also a prime example of why Bitcoin was created. The “Chancellor on the Brink” message contained in the Genesis block was an explicit comment by Satoshi Nakamoto on her inspiration for the technology. We are now seeing a new iteration of this inevitable consequence of fiat currency systems: and with it, new proof of why bitcoin exists.