House Speaker Kevin McCarthy (CA-20) made it clear House Republicans would not help President Joe Biden address the issues posed by the collapse of Silicon Valley Bank (SVB).

The Biden Administration Approach

On Sunday, March 12, as the bank's fate remained uncertain, Speaker McCarthy appeared on "Sunday Morning Futures" on Fox News with Maria Bartiromo to discuss the situation around the failing lender. He revealed he had spoken with key monetary policy officials, including Treasury Secretary Janet Yellen and Fed Chair Jerome Powell.

Yellen had previously voiced her opposition to a 2008-style bailout, reported the Daily Mail.

McCarthy told Bartiromo that he wanted to see a buyer take the distressed bank over. He said the bank was "attractive for someone to want to purchase it; it's just the timeline on where to move forward."

Yellen also stated her support for a buyer fixing the problem in this way.

What's Happening Now?

Since McCarthy's appearance on Fox, moves have been made to support Silicon Valley Bank's deposit holders.

Addressing the situation on Monday, President Biden said taxpayers would not bail the bank out, but also that depositors would not lose their funds, The Hill reported.

Instead, the money required to address the situation will come from the Deposit Insurance Fund. This fund comes from premiums paid by banks to provide coverage in the event of situations like these.

HSBC Takes Over British Operations

On Monday, British lender HSBC confirmed it would take over SVB UK, the British wing of the troubled bank, reported Sky News.

The two institutions reportedly agreed on a purchase fee of £1 billion. The arrangement will see SVB UK's operations continue as normal and gradually become part of HSBC's business operations.

The purchasing bank reportedly had concerns that it would have to contend with stringent anti-money laundering checks prior to completion of the purchase; these were apparently assuaged.

How Did Silicon Valley Bank Get Into Trouble?

According to a CNN Business report on the Silicon Valley Bank situation, the issues that led to its downfall existed for several years.

The lender worked primarily with life science and tech companies; estimates suggest it had worked with nearly half of the U.S. companies in these sectors.

Its operations expanded in recent years alongside the explosion in activity in the tech sector. Its assets (including loans) reportedly tripled between year-end 2019 and March 2023.

However, its large holdings in U.S. government bonds began causing problems of late. As the Fed repeatedly increased interest rates in a bid to manage inflation, the prices of its bonds dropped sharply.

Interest-rate hikes also made it harder for tech companies to borrow cash and repay their existing debts, heaping further trouble on SVB.

Silicon Valley Bank's collapse was the largest of its kind since 2008, The Hill reported.