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Treasury Secretary Janet Yellen told Sen. James Lankford (R-OK) during a Senate Finance Committee hearing on Thursday that Chinese depositors will be made whole while community banks will have to pay higher fees.
Yellen spoke before the Finance Committee to discuss President Joe Biden’s budget proposal, but given the increasing concern over the instability in the banking sector, most questions revolved around the federal government’s response to the collapse of Silicon Valley Bank, Signature Bank, and others.
Lankford asked Yellen if Chinese investors, including those with affiliations with the Chinese Communist Party, would be made whole through the government’s efforts to stave off a financial crisis.
He asked:
It has been reported publicly that SVB had a large number of Chinese investors, including some that are directly connected to the Chinese Communist Party. Will those companies, entities, and investors that are Chinese investors be made whole based on assessments in my banks in Oklahoma? So, what I’m asking is, will my banks in Oklahoma pay a special assessment to be able to make Chinese investors whole from Silicon Valley Bank?
Yellen responded, “Uninsured investors will be made whole in that bank and I suppose that could include foreign depositors, but I don’t believe there is any legal basis to discriminate among the uninsured.”
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Part of the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corporation’s (FDIC) moves to stave off a banking crisis will include a special assessment on banks, or a fee, to replenish the Deposit Insurance Fund.
Lankford decried that community banks will have to pay an additional fee to make Chinese investors whole.
The Treasury secretary responded, saying that they are doing what they can to fight off a worsening economic situation.
Yellen said, “If we have a collapse of the banking system and its economic consequences, that will have very severe effects on the banks in Oklahoma.”
Sean Moran is a policy reporter for Breitbart News. Follow him on Twitter @SeanMoran3.
