No doubt, the Biden administration felt an urgent need to offer a reassuring presence and clear statements about the collapse of Silicon Valley Bank, and the fate of all its depositors, and deployed Treasury Secretary Janet Yellen to CBS News’ Face the Nation.
Unfortunately, the Federal Deposit Insurance Corporation and the SVB managers are still hashing out the bank’s fate this Sunday morning, and either Yellen doesn’t know or can’t say what will happen next. So her appearance amounted to a lot of insisting that the was no reason for anyone to worry, that the U.S. banking system was strong and secure, and that beyond that, she couldn’t answer many questions with any details.
On whether the U.S. government will need to intervene and take emergency measures because of SVB failure: “I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation. I can’t really provide further details at this time.”
On whether depositors will be paid back in full: “Look, I’m not going to comment on the details of the situation at this point. I simply want to say that we’re very aware of the problems that depositors will have, many of them are small businesses that employ people across the country.”
On the impact on Silicon Valley and technological innovation: “So, I really can’t comment on what the impact will be. I think it depends on how this situation is resolved. And that’s something that we’re working on.”
On whether there are signs the bank was poorly managed: “The FDIC has placed this bank in receivership and will be working over the weekend to manage its resolution. And in the meantime, I really can’t comment on details about the situation of this bank.”
On whether the Federal Reserve will be able to continue raising interest rates if there’s a significant risk to regional banks: “Well, Margaret, the Federal Reserve is independent and charged with making judgments about what the appropriate course of action is, to address financial risks, and also to achieve their inflation and employment goals. And I’m not going to comment on what the appropriate response is for them.”
This raises the question of whether it’s worth it to send a cabinet official out to the Sunday shows if that official can’t discuss the matter in any significant detail. And whether anyone felt reassured hearing Yellen say, over and over again, that she couldn’t comment any further.