US Treasury Secretary Janet Yellen on Sunday said the government wanted to avoid financial "contagion" from the implosion of Silicon Valley Bank — but ruled out a bailout of the institution.
"We want to make sure that the troubles that exist at one bank don't create contagion to others that are sound", Ms Yellen said during an interview with CBS.
US regulators on Friday closed SVB Financial Group, a key lender to US start-ups since the 1980s, putting the tech-heavy lender into receivership after a run on deposits made it no longer tenable for the medium-sized bank to stay afloat on its own.
Ms Yellen said the government was working with the Federal Deposit Insurance Corporation (FDIC) on a "resolution" of the situation at SVB, where approximately 96 per cent of deposits are not covered by the FDIC's reimbursement guarantee, which only covers $250,000 in each account.
"I'm sure they [the FDIC] are considering a wide range of available options that include acquisitions", she said.
House Speaker Kevin McCarthy, meanwhile, said he had been in touch with the Biden administration and was hopeful that US officials would make an announcement on Sunday to address SVB's collapse.
“Well, I have talked with the administration, from Jay Powell and Janet Yellen", Mr McCarthy told Fox News.
"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."
“I’m hopeful that something can be announced today to move forward”, the California Republican said.
Little known to the general public, SVB specialised in financing start-ups and had become the 16th largest US bank by assets. At the end of 2022, it had $209 billion in assets and approximately $175.4 billion in deposits.
Since the 2008 failure of Lehman Brothers and the ensuing financial meltdown, US regulators have required major banks to hold additional capital in case of trouble.
US and European authorities also organise regular "stress tests", designed to uncover vulnerabilities at the largest banks.
SVB's implosion represents not only the largest bank failure since that of Washington Mutual in 2008, but also the second largest failure ever for a retail bank in the US.
Earlier on Sunday, British Prime Minister Rishi Sunak insisted there was no contagion risk to UK banks after the collapse of SVB, as the government worked “at pace” to find a way to ring-fence Britain's technology and life sciences industries.
On Friday, Elon Musk said on Twitter that he was "open to the idea" of buying SVB. The world's second-richest man did not elaborate.
Agencies contributed to this report.