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Treasury Secretary Janet Yellen said there are "a few" banks the department is closely watching as a crisis at Silicon Valley Bank roils the financial world.
During a hearing before the House Ways & Means Committee Friday morning, Yellen said she is closely watching Silicon Valley Bank, which is scrambling to raise fresh capital sparking fears that other banks could be forced to take losses and raise cash.
"There are recent developments that concern a few banks that I'm monitoring very carefully and when banks experience financial loss it is and should be a matter of concern," Yellen told lawmakers.
Shares of Silicon Valley Bank's parent company, SVB Financial (SIVB), were halted for trade early Friday after falling 60% on Thursday and another 68% in pre-market trading.
The latest reports from CNBC's David Faber indicated the firm was seeking a buyer after its efforts to raise new capital had failed. On Wednesday, SVB said it would book a $1.8 billion after-tax loss on sales of investments and seek to raise $2.25 billion by selling stock.
Shares were also halted in Signature Bank (SBNY), a New York institution that serves some cryptocurrency clients, after its shares dropped more than 16%.
First Republic Bank (FRC), which serves some companies in the venture world and also targets high-net worth clients from the tech industry, saw shares fall as much as 40% early Friday. Its shares were also halted, along with those of other regional banks Western Alliance Bancorp (WAL) and PacWest Bancorp (PACW).
Concerns about risks to other banks spread on Thursday as stocks of giant financial institutions tumbled. A major bank index fell by the most Thursday in nearly three years. Shares of JPMorgan (JPM) fell 5.41% Thursday and shares were roughly flat during Friday's open. Shares of Bank of America (BAC) fell 6.20% Thursday and opened Friday down as much as 2%.
Yellen's appearance on Capitol Hill also comes after Friday's key February jobs report, which showed the economy added 311,000 new jobs last month as labor market strength persists amid stubbornly high inflation and aggressive rate hikes from the Fed. Speaking about the jobs report on Friday, Yellen said the data showed, "a continued strong labor market putting Americans back to work."
Comments from Fed Chair Jerome Powell earlier this week the central bank would need to raise rates higher than preciously expected pushed markets to price in a 0.50% rate hike later this month.
The turmoil at SVB and the broader banking sector, however, appears to have tempered market expectations with data from the CME Group now reflecting a roughly 60% chance the Fed matches its February rate hike of 0.25% on March 22.