After SVB collapsed into receivership on Friday in the biggest bank failure in over a decade, the Federal Deposit Insurance Corp. kicked off an auction process for its assets late Saturday, as it aims to make a portion of clients’ uninsured deposits available as soon as Monday, according to people with knowledge of the situation. The agency and the Federal Reserve have also discussed a fund to backstop deposits if more banks fail as part of wider contingency planning, people said. 

Those efforts are aimed at protecting depositors, rather than bailing out investors, Yellen said on CBS’s “Face the Nation” on Sunday. 

“During the financial crisis there were investors and owners of systemic large banks that were bailed out,” the Treasury Secretary said. “And we’re certainly not looking — and the reforms that have been put in place means that we’re not going to do that again. But we are concerned about depositors and we’re focused on trying to meet their needs.”

Democratic Representative Ro Khanna, whose California district is home to SVB, said the FDIC is working to find a buyer and urged the US government to guarantee all of the bank’s deposits. House Speaker Kevin McCarthy, a Republican from California, told Fox News’s “Sunday Morning Futures” he’s “hopeful that something can be announced today to move forward.”  

Concern about the health of other smaller banks focused on the venture capital and startup communities is prompting regulators to consider extraordinary measures. Officials have discussed the new fund to backstop deposits in conversations with banking executives, in the hope that setting up such a vehicle would reassure depositors and help contain any panic, said the people. They asked not to be identified because the talks weren’t public. 

Final bids for SVB’s assets are due Sunday afternoon but a winner may not be known until late in the day, other people with knowledge said. 

In her CBS interview, Yellen renewed assurances that the US banking system is safe, well-capitalized and resilient.

“I simply want to say that we’re very aware of the problems that depositors will have,” she said. “Many of them are small businesses that employ people across the country and of course this is a significant concern and working with regulators to try to address these concerns.”

US regulators are under time pressure to sell assets of SVB Financial Group, the bank’s parent, prompting offers by some investment firms to provide financing to companies with cash trapped at Silicon Valley Bank.

Asked whether the FDIC might be open to a “foreign bank” coming in as a buyer, Yellen said, “I’m sure they’re considering a wide range of available options that include acquisitions.”

While the FDIC insures deposits of up to $250,000, the vast majority of funds held in at SVB far exceeded that. The agency has said it will make 100% of protected deposits available on Monday.

Asked on “Face the Nation” about the option of a private-sector bank buying SVB’s assets, Khanna said: “That would be the ideal situation and our delegation that talked to the FDIC last night made that clear. That’s what we urged them to work on, they said they’re working on it.”

Republican presidential candidate Nikki Haley said Saturday that US taxpayers shouldn’t bail out Silicon Valley Bank. “Private investors can purchase the bank and its assets,” Haley, a former South Carolina governor and US ambassador to the United Nations, said in a statement.

The White House repeated its assurances on the US banking system, with Office of Management and Budget Shalanda Young citing regulatory changes put in place after the financial crisis more than a decade ago.

“What I’ll say about the banking system overall is it’s more resilient, and has a better foundation than before the financial crisis,” Young said on CNN’s “State of the Union.”

“Americans can have confidence in the safety and soundness of our banking system” and the US economy is “extremely strong,” Yellen said on CBS.