Janet Yellen Is the Real Contagion
Commentary
Well, she said it. No legislation, no vote, no court decision, and not even an executive order. It was only one announcement from an appointed lifetime bureaucrat. But it changes everything.
The Secretary of the Treasury has told the American Bankers Association that the government is there for any bank that is facing a run, presumably for up to 100 percent of deposits. Concerning her bailout of Silicon Valley Bank, and completely ignoring the dangerous moral hazard this represents, she says:
“Our intervention was necessary to protect the broader U.S. banking system. And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”…