(MENAFN) On Sunday, US Treasury Secretary Janet Yellen announced that the federal government will not provide a bailout for the investors of Silicon Valley Bank (SVB). This comes after the bank’s sudden collapse, which caused turmoil in the US financial markets last week. Yellen explained that during the financial crisis, large banks with systemic importance were bailed out. However, reforms have since been put in place to prevent this from happening again.

In an interview with CBS’ Face The Nation public affairs program, Yellen expressed concerns about the effect of SVB’s collapse on depositors and stated that financial regulators are focused on addressing their needs. While they are not bailing out investors, Yellen said regulators are taking steps to prevent the fallout from spreading to other institutions. She explained that the goal of regulation and supervision is to prevent contagion.

The Federal Deposit Insurance Corporation (FDIC) has shut down SVB following its sudden collapse. In a statement on Friday, the FDIC announced that the bank was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver. SVB was the largest bank in Silicon Valley based on local deposits and one of the biggest banks in the nation.

The collapse of SVB highlights the importance of maintaining sound financial practices and preventing contagion in the financial system. While the federal government has opted not to bail out investors, regulators are working to ensure that depositors are protected and that the fallout from SVB’s collapse does not spread to other institutions.

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