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Treasury secretary rules out bailout for Silicon Valley Bank | CNN Politics

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Treasury secretary rules out bailout for Silicon Valley Bank | CNN Politics


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CNN
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Treasury Secretary Janet Yellen on Sunday dominated out a federal bailout for Silicon Valley Financial institution following its spectacular collapse final week.

“Let me be clear that throughout the monetary disaster, there have been buyers and homeowners of systemic giant banks that had been bailed out, and we’re definitely not trying,” Yellen informed CBS Information when requested if there might be a bailout. “And the reforms which were put in place signifies that we’re not going to try this once more.”

Additionally Sunday, Shalanda Younger, the director of the White Home Workplace of Administration and Finances, burdened in an interview with CNN’s Kaitlan Collins on “State of the Union” that the US banking system at giant was “extra resilient” now.

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“It has a greater basis than earlier than the [2008] monetary disaster. That’s largely because of the reforms put in place,” Younger mentioned on “State of the Union.”

Yellen mentioned she’s been listening to from depositors all weekend, a lot of whom are “small companies” and make use of 1000’s of individuals. “I’ve been working all weekend with our banking regulators to design acceptable insurance policies to deal with this example,” the Treasury secretary mentioned, declining to supply additional particulars.

SVB collapsed Friday morning after a shocking 48 hours wherein a financial institution run and a capital disaster led to the second-largest failure of a monetary establishment in US historical past.

The chaos instigated by excessive rates of interest led to an old style financial institution run on Thursday, wherein depositors yanked $42 billion from SVB.

When the FDIC took management of the financial institution Friday, it mentioned it might pay prospects their insured deposits on Monday, which solely covers as much as $250,000. However there’s some huge cash – and affect – at stake.

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SVB offered financing for nearly half of US venture-backed know-how and well being care corporations. On the finish of 2022, the financial institution mentioned it had $151.5 billion in uninsured deposits, $137.6 billion of which was held by US depositors.

Although some huge cash could have come out throughout the financial institution run and prospects might obtain some uninsured funds as the federal government liquidates SVB, they’re nonetheless uncertain if they’ll recuperate all their money.

Whereas comparatively unknown exterior Silicon Valley, SVB was among the many high 20 American industrial banks, with $209 billion in whole property on the finish of final 12 months, in keeping with the FDIC. It’s the biggest lender to fail since Washington Mutual collapsed in 2008.

Regardless of preliminary panic on Wall Avenue over the run on SVB, which prompted its shares to crater, analysts mentioned the financial institution’s collapse is unlikely to set off the form of domino impact that gripped the banking business throughout the monetary disaster.

However the collapse has prompted a bailout debate in Washington as lawmakers assess the fallout.

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Republican Rep. Nancy Mace of South Carolina informed Collins in a separate interview on “State of the Union” that she doesn’t assist a bailout “right now” however cautioned, “It’s nonetheless very early.”

“We can not maintain bailing out non-public corporations, as a result of there’s no penalties to their actions. Individuals, after they make errors or break the legislation, need to be held accountable on this nation,” she mentioned.

Home Speaker Kevin McCarthy informed Fox Information on Sunday he has spoken with Yellen and Federal Reserve Chair Jerome Powell in regards to the collapse of SVB and believes “they do have the instruments to deal with the present state of affairs.”

“They do know the seriousness of this, and they’re working to attempt to come ahead with some announcement earlier than the markets open,” the California Republican mentioned.

One other Californian, Democratic Rep. Ro Khanna, who represents a lot of Silicon Valley, mentioned the Treasury Division must be extra aggressive in ensuring all depositors in SVB can have entry to their cash.

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“The precept must be that every one depositors might be protected and have full entry to their accounts Monday morning,” Khanna informed CBS Information.

Khanna additionally made clear that buyers and shareholders in SVB, which is headquartered in his district, shouldn’t be bailed out.

“I’ve no sympathy for the executives, no sympathy for the individuals who have inventory there. However the depositors are protected,” he mentioned.

Democratic Rep. Josh Gottheimer of New Jersey, a member of the Home Monetary Companies Committee, despatched a letter Sunday to Yellen, Powell, FDIC Chairman Martin Gruenberg and Michael Hsu, the performing head of the Workplace of the Comptroller of the Forex, calling on them to “act swiftly.”

Gottheimer advisable the FDIC prioritize discovering a purchaser for SVB “that has the assets to supply a seamless transition for the financial institution’s depositors and debtors,” in keeping with a replica of the letter obtained by CNN.

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Senate Banking Committee member Kevin Cramer mentioned he hopes the collapse of SVB is “very localized and we are able to tackle it in that method.”

“The issue is we reside in a really emotional time, the place markets are emotional. The reference to social media as being an accelerator, if you’ll, of a few of that emotion, I believe, might be problematic,” the North Dakota Republican informed NBC Information. “However I hope with the weekend got here some calm and definitely some technique as effectively.”

This story has been up to date with extra response.

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Iowa floodwaters breach levees as even more rain dumps onto parts of the Midwest

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Iowa floodwaters breach levees as even more rain dumps onto parts of the Midwest

A tornado is seen near Cedar Rapids, Iowa, on Tuesday. More severe weather was forecast to move into the region, potentially bringing large hail, damaging winds and tornadoes in parts of western Iowa and eastern Nebraska, according to the National Weather Service.

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DES MOINES, Iowa — Tornado warnings, flash flooding and large hail added insult to injury for people in the Midwest already contending with heat, humidity and intense flooding after days of rain.

The National Weather Service on Tuesday afternoon and evening issued multiple tornado warnings in parts of Iowa and Nebraska as local TV news meteorologists showed photos of large hail and spoke of very heavy rain.

Earlier on Tuesday, floodwaters breached levees in Iowa, creating dangerous conditions that prompted evacuations.

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A vast swath of lands from eastern Nebraska and South Dakota to Iowa and Minnesota has been under siege from flooding from torrential rains since last week, while also being hit with a scorching heat wave. Up to 18 inches of rain have fallen in some areas, and some rivers rose to record levels. Hundreds of people were rescued, homes were damaged and at least two people died after driving in flooded areas.

Onlookers take in the catastrophic damage to the Rapidan Dam site in Rapidan, Minn., on Monday. Debris blocked the dam, forcing the heavily backed up waters of the Blue Earth River to reroute along the bank nearest the Dam Store.

Onlookers take in the catastrophic damage to the Rapidan Dam site in Rapidan, Minn., on Monday. Debris blocked the dam, forcing the heavily backed up waters of the Blue Earth River to reroute along the bank nearest the Dam Store.

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The sheriff’s office in Monona County, near the Nebraska border, said the Little Sioux River breached levees in several areas. In neighboring Woodbury County, the sheriff’s office posted drone video on Facebook showing the river overflowing the levee and flooding land in rural Smithland. No injuries were immediately reported.

Patrick Prorok, emergency management coordinator in Monona County, described waking people at about 4 a.m. in Rodney, a town of about 45 people, to recommend evacuation. Later Tuesday morning, the water hadn’t yet washed into the community.

“People up the hill are saying it is coming our way,” Prorok said.

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Rachel Morsching sits Tuesday on the flooded porch of her father Dean Roemhildt's home in Waterville., Minn. Waters from the nearby Tetonka and Sakatah lakes have encroached on the town amid recent heavy rains.

Rachel Morsching sits Tuesday on the flooded porch of her father Dean Roemhildt’s home in Waterville., Minn. Waters from the nearby Tetonka and Sakatah lakes have encroached on the town amid recent heavy rains.

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As new areas were flooding Tuesday, some cities and towns were cleaning up after the waters receded while others downstream were piling sandbags and taking other measures to protect against the oncoming swelled currents. Some normal, unassuming tributaries ballooned into rushing rivers, damaging homes, buildings and bridges.

“Normally, this river is barely a trickle,” 71-year-old Hank Howley said as she watched the Big Sioux’s waters gush over a broken and partially sunken rail bridge in North Sioux City, South Dakota, on Monday. “Really, you could just walk across it most days.”

South Dakota state geologist Tim Cowman said that the five major rivers in the state’s southeastern corner have crested and are dropping, albeit slowly. The last of those rivers to crest, the James, did so early Tuesday.

Heavy rains in recent days have submerged farmland near Vermillion, S.D., on Tuesday. Flooding has devastated communities in several states across the Midwest.

Heavy rains in recent days have submerged farmland near Vermillion, S.D., on Tuesday. Flooding has devastated communities in several states across the Midwest.

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In a residential development along McCook Lake in North Sioux City, the devastation became clear Tuesday as floodwaters began to recede from Monday, exposing collapsed streets, utility poles and trees. Some homes had been washed off their foundations.

“Currently, there is no water, sewer, gas or electrical service in this area,” Union County Emergency Management said in a Facebook post.

President Biden approved a major disaster declaration for affected counties in Iowa on Monday, a move that paves the way for federal aid to be granted.

To the south in Sioux City and Woodbury County, Iowa, officials responded to residents’ complaints that they had received little warning of the flooding and its severity. Sioux City Fire Marshal Mark Aesoph said at a news conference Tuesday that rivers crested higher than predicted.

“Even if we would have known about this two weeks ago, there was nothing we could do at this point. We cannot extend the entire length of our levee,” Aesoph said. “It’s impossible.”

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Water had spilled over the Big Sioux River levee, and Aesoph estimated hundreds of homes likely have some internal water damage.

Homes on the south side of Spencer, Iowa, near the Little Sioux River are unlivable as water has reached the main floor, resident Ben Thomas said. A lot of people in town are facing a “double whammy,” with homes and businesses affected.

Officials in Woodbury County said around a dozen bridges over the Little Sioux River had been topped by flood water, and each would need to be inspected to see if they can reopen to traffic.

Forever Wildlife Lodge and Clinic, a nonprofit animal rescue, in northwest Iowa has answered over 200 calls since the flooding started, said licensed wildlife rehabilitator Amanda Hase.

Hase described the flooding as “catastrophic” for Iowa wildlife, which are getting washed out of dens, injured by debris and separated from each other. She and other rehabilitators are responding to calls about all kinds of species, from fawns and groundhogs to bunnies and eaglets.

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“I’ve never seen it this bad before, ever,” she said.

Floodwaters rush over a collapsed railroad bridge over the Big Sioux River near North Sioux City, S.D., on Monday.

Floodwaters rush over a collapsed railroad bridge over the Big Sioux River near North Sioux City, S.D., on Monday.

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Further to the east in Humboldt, Iowa, a record crest of 16.5 feet was expected Wednesday at the west fork of the Des Moines River. Amid high temperatures and humidity, nearly 68,000 sandbags have been laid, according to county emergency manager Kyle Bissell.

Bissell told reporters Tuesday that there was no water on the streets yet, but flooding had begun in some backyards and was reaching up to foundations. Humboldt is home to nearly 5,000 residents.

More severe weather was forecast to move into the region Tuesday, potentially bringing large hail, damaging winds and even a brief tornado or two in parts of western Iowa and eastern Nebraska, according to the National Weather Service. Showers and storms were also possible in parts of South Dakota and Minnesota, the agency said.

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In Michigan, more than 150,000 homes and businesses were without power Tuesday morning after severe thunderstorms barreled through, less than a week after storms left thousands in the dark for days in suburban Detroit.

The weather service also predicted more than two dozen points of major flooding in southern Minnesota, eastern South Dakota and northern Iowa, and flood warnings are expected to continue into the week.

Many streams, especially with additional rainfall, may not crest until later this week as the floodwaters slowly drain down a web of rivers to the Missouri and Mississippi. The Missouri will crest at Omaha on Thursday, said Kevin Low, a weather service hydrologist.

North of Des Moines, Iowa, the lake above the Saylorville Dam was absorbing river surge and expected to largely protect the metro area from flooding, according to the Polk County Emergency Management Agency. The U.S. Army Corps of Engineers projected Tuesday that water levels at Saylorville Lake will rise by more than 30 feet by the Fourth of July.

Jared Gerlock (left) and his son, Robbie, carry a bin of water-logged stuffed animals out of the flood-damaged basement of their home on East Second Street in Spencer, Iowa, on Tuesday. Officials said about 40% of properties in the city were affected after the Little Sioux River flooded.

Jared Gerlock (left) and his son, Robbie, carry a bin of water-logged stuffed animals out of the flood-damaged basement of their home on East Second Street in Spencer, Iowa, on Tuesday. Officials said about 40% of properties in the city were affected after the Little Sioux River flooded.

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Outside Mankato, Minnesota, the local sheriff’s office said Monday that there was a “partial failure” of the western support structure for the Rapidan Dam on the Blue Earth River after the dam became plugged with debris. Flowing water eroded the western bank, rushed around the dam and washed out an electrical substation, causing about 600 power outages.

Eric Weller, emergency management director for the Blue Earth County sheriff, said the bank would likely erode more, but he didn’t expect the concrete dam itself to fail. The two homes downstream were evacuated.

Minnesota Gov. Tim Walz on Tuesday cautioned against rebuilding too fast, instead emphasizing more sustainable repairs that could prevent or mitigate future flooding.

“Nature doesn’t care whether you believe in climate change or not,” Walz said. “The insurance companies sure believe in it. The actuarials sure believe in it, and we do.”

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WikiLeaks gadfly: the Julian Assange saga

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WikiLeaks gadfly: the Julian Assange saga

Julian Assange had already been ruffling feathers for several years when, in 2010, the Australian hacker and publisher released leaked footage of a US helicopter crew gunning down unarmed Iraqis on a Baghdad street.

The video, dubbed Collateral Murder, was among thousands of classified US military documents that the WikiLeaks website published at the time. As much as any, it put its founder on a collision course with America that only this week — 14 years later — is reaching some form of resolution.

Assange this week walked free from Belmarsh high-security prison in London, where he has been incarcerated since 2019, fighting extradition to the US on espionage charges.

He was on his way by plane to the US-controlled Northern Mariana Islands in the Pacific where, in return for a sentence of time served, he will plead guilty to one charge of conspiracy to obtain and disseminate classified information. Other charges relating to the publication of the material have been dropped.

Assange will then be free to return to his native Australia, without whose patience and diplomatic support some allies believe he might never have seen this day.

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A screen grab taken from the X account of WikiLeaks of Julian Assange following his release from prison © @WikiLeaks/PA Wire

“It’s debatable whether this is a victory for freedom or not,” said Vaughan Smith, founder of the Frontline Club, the group for journalists in Paddington where Assange stayed in the months that he was first polarising global opinion.

At the time, supporters saw him as a fearless warrior for press freedom, exposing double standards at the heart of power. Detractors were forming a different view: they saw a dangerous gadfly, disclosing information regardless of the consequences.

Smith, who has remained a loyal friend, said that whichever way you look at it, Assange has been through a terrible ordeal.

Facing allegations of rape in Sweden, which he denied, he spent seven years holed up in the Ecuadorean embassy in London, attracting support outside the gates from a diverse crew of celebrities including Pamela Anderson, Lady Gaga and the former Greek finance minister Yanis Varoufakis.

Once the Ecuadoreans had tired of him, he was arrested and sent to Belmarsh. “It’s pretty sobering the way he has been made to suffer,” said Smith.   

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WikiLeaks founder Julian Assange, second left, and Frontline Club founder Vaughan Smith, second from right, attend a press conference at the Frontline Club in London on January 17 2011
Julian Assange, second left, and Frontline Club founder Vaughan Smith, second from right, attend a press conference at the Frontline Club in London on January 17 2011. Smith says of Assange: ‘He doesn’t necessarily fit in’ © Ben Stansall/AFP/Getty Images

Collateral Murder was published in 2010 alongside a trove of classified US military documents relating to the Iraq and Afghan wars. These were obtained from Chelsea Manning, the former US army intelligence analyst, who served seven years of a 35 year sentence for her part in the saga.   

Shot from an Apache helicopter gunship, the footage exposed casual rules of engagement by US troops, along with a loose relationship with the truth on the part of commanders who had portrayed victims of the 2007 incident as armed.

It was one explosive element in a huge data dump that was highly damaging to the reputation of the US military. Two of the 11 civilians killed were employees of the Reuters news agency.

At first the information from WikiLeaks was published in careful collaboration with The Guardian, New York Times, Der Spiegel, El País and Le Monde newspapers, redacted to protect the identities of sources and personnel involved.

But later — after Assange had fallen out with some of the newspapers he had worked with, and a German hacker had accessed the files — WikiLeaks released the raw documents en masse, along with more than 250,000 US diplomatic cables.

Alan Rusbridger, former editor of The Guardian, said the advent of WikiLeaks, which started life in 2006 exposing corruption in Kenya, marked the beginning of a “new era of transparency”.

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At the same time, journalists are enduring a sustained backlash as western intelligence agencies come down hard on anyone touching classified information.

“The stuff on Iraq and Afghanistan needed to come out,” Rusbridger said. The diplomatic cables were less impactful, he argued, in part because many of them made for “sensible” reading: “It does make you reconsider why all this stuff has to be so secret.”

For the Americans, some of the less-than-diplomatic language used in the cables damaged relations with allies.

Worse, they claimed, it brought sources who were exposed into harm’s way.

At the time of Assange’s indictment in 2019, John Demers, the then-top justice department national security official, said: “No responsible actor, journalist or otherwise, would purposely publish the names of individuals he or she knew to be confidential human sources in war zones, exposing them to the gravest of dangers.”

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Julian Assange speaks to media and supporters from a balcony at the Ecuadorian embassy in London in May 2017
Julian Assange speaks to media and supporters from a balcony at the Ecuadorean embassy in London in May 2017 © Luke MacGregor/Bloomberg

Assange first honed his skills as a teenage hacker in Australia where he also had his first brush with the law. Smith said some of Assange’s later problems were the result of being “different”.

His character, as well as his work, has divided opinion.

“He doesn’t necessarily fit in. From time to time, people who are different have something to say, and humans are inclined to turn on them,” Smith said. The rape allegations, which have passed the point at which they can be prosecuted under Swedish law, had “diminished him and poisoned him in the public eye”, he added.

Others who met Assange along the way were less generous. One described him as “a mercurial guy — sometimes he would behave like a CEO, strategic and efficient. Other times he would be like a badly behaved child.”

UK district judge Michael Snow, who convicted Assange in 2019 for jumping bail in 2012, described him as “a narcissist who cannot get beyond his own selfish interests”.

Even in confinement, Assange remained a potent force, playing a tumultuous role in the 2016 US elections when WikiLeaks released a tranche of emails from the Democratic party. Federal prosecutors said these were originally stolen by Russian intelligence operatives.

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Donald Trump, at first a fan, eventually turned on him too.  

Assange’s treatment during the extradition process in the UK has also proved controversial. For champions of press freedom, it has shown the UK in a poor light, pandering to US interests.

Nick Vamos, an expert in extradition law, disagrees. He suggested that a High Court decision this year to allow Assange to appeal may have been instrumental in securing his release.

“Our extradition laws are generous in terms of allowing people to argue different points,” he said. “That is ultimately what has brought everyone to the negotiating table.”

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