(Reuters) – The U.S. Federal Reserve and the Federal Deposit Insurance coverage Corp are weighing the creation of a fund that will permit regulators to backstop extra deposits at banks that run into bother within the wake of Silicon Valley Financial institution’s collapse, Bloomberg Information reported on Saturday.

Regulators mentioned the brand new particular automobile in conversations with banking executives and hope such a measure would reassure depositors and assist include any panic, the report mentioned, citing individuals conversant in the matter.

The brand new automobile is a part of the company’s contingency planning as panic spreads concerning the well being of banks centered on the enterprise capital and startup communities, the report added.

The U.S. Federal Reserve declined to touch upon the report, whereas FDIC didn’t instantly reply to a Reuters request for remark.

Earlier on Saturday, U.S. President Joe Biden spoke with California Governor Gavin Newsom concerning the SVB failure and the efforts to deal with the state of affairs.

Silicon Valley Financial institution imploded after depositors, involved concerning the lender’s monetary well being, rushed to withdraw their deposits. The frenetic two-day run on the financial institution blindsided observers and shocked markets, wiping out greater than $100 billion in market worth for U.S. banks.