By Reuters
WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) returned $40 billion to the U.S. Treasury’s main account on Tuesday, reversing a $40 billion withdrawal on Friday as the regulator took control of a failed Silicon Valley bank, Treasury financial data released Wednesday showed. .
A Treasury spokeswoman referred questions about the fund transfers to the FDIC, which declined to comment.
On Tuesday, before the cash recovery was revealed in the latest Daily Treasury Statement, the Treasury said the $40 billion withdrawal would not affect estimates of when it will no longer be able to pay all of the U.S. government’s bills without raising the debt ceiling.
After an initial $40 billion withdrawal on Friday as SVB Financial was shut down and placed under FDIC receivership, the Treasury, FDIC and Federal Reserve on Sunday announced guarantees for insured and uninsured deposits at the institution to bolster confidence in the banking system.
The same protection was offered to New York’s Signature Bank, which failed on Sunday, and the Federal Reserve opened a new facility to give banks access to emergency funds.
The recovery of Treasury funds at the Fed came a day after SVB and Signature reopened access to Fed facilities on Monday, allowing them to borrow from the Fed’s discount window by pledging par value bonds as collateral. than their reduced market value.
By David Lowder
