The Biden administration announced Sunday night that all depositors at the failed Silicon Valley Bank would have access to all their money on Monday morning, approving an extraordinary intervention aimed at averting a crisis in the financial markets.

Authorities said they were also extending protection to depositors of a second bank, Signature Bank of New York, which state regulators closed on Sunday as unease in the financial sector appeared to spread. Separately, the Federal Reserve announced that it was creating a new lending facility for the nation's banks, designed to buttress them against financial risks caused by Friday's collapse of SVB.

The series of crisis maneuvers by federal authorities - announced just hours before the start of trading in Asia - reflected the fear that has rippled through the banking sector just a few days after the collapse of Silicon Valley Bank, which many financial experts thought initially was confined to one part of the economy.

The decision by Treasury to backstop all of SVB's deposits - not just those up to $250,000 that are automatically insured under federal law - will likely ignite a political firestorm over the decision to protect the assets of tech firms, venture capitalists, and other rich people in California.

"Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system," a joint statement from the Treasury Department, the Fed and the Federal Deposit Insurance Corporation said. "This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth."

On a call with reporters on Sunday evening, a senior Treasury official defended the administration's decision as necessary to protect the stability of the banking system and emphasized that the move was aimed at protecting companies and workers who could be harmed by the bank's collapse - not the bank's shareholders or executives. The official spoke on the condition of anonymity to speak about internal deliberations, under the conditions of the call.

The Treasury official also said the decision to protect all deposits was made following a recommendation by the Federal Deposit Insurance Corporation and the Federal Reserve, the nation's top banking regulators. President Biden was also consulted on the announcement.

Treasury Secretary Janet L. Yellen stressed in a statement that taxpayers would bear none of the burden of protecting the depositors. Their funds will be backstopped by a pool of money that is regularly paid into by U.S. banks, which currently has more than $100 billion in it.

The new Fed program will enable banks to pledge U.S. Treasuries and other safe government securities as collateral in return for loans of up to one year from the central bank.

The initiative is aimed at resolving one of the problems that led to SVB's failure: unrealized losses on government securities that the bank owned. As the Fed raised interest rates last year, the value of those securities fell.

Industry-wide, banks at the end of last year reported $620 billion in such paper losses, according to the FDIC.

Banks don't lose money if they hold those treasuries until they mature. But if they must sell them to cover depositor withdrawals, the losses appear on their books.

The loan terms are more generous than the bank's traditional 90-day lending channel. The Fed will lend against the security's original value rather than its depressed market value, thus potentially allowing banks to delay recognizing their losses for up to one year.

The new program, and the Fed's support for the SVB and Signature measures, represent "classic central bank panic actions," according to a Fed official, who briefed reporters on the condition of anonymity.

The assertions that the decisions do not amount to a "bailout," however, are likely to be challenged by critics of the move. While the fund going to the depositors is paid into by U.S. banks, it is ultimately backstopped by the Treasury Department - and therefore U.S. taxpayers.

The initiative at the central bank marked the most expansive use of Federal Reserve authority since the early days of the pandemic, when the central bank established several programs to ensure that credit continued flowing to employers and consumers.

Under the new program, the Fed said it would provide loans of up to one year to banks, savings associations, credit unions, and other eligible depository institutions in return for collateral such as U.S. Treasuries, agency debt and mortgage-backed securities.

The announcement came after federal officials spent the weekend scrambling to avert a broader financial problem in the wake of SVB's sudden demise.

The decision appeared to reflect that federal authorities have yet to find another bank to buy the remnants of SVB. Most bank failures are resolved that way and enable depositors to avoid losing any money.

Earlier in the day, in calls with federal banking regulators late Saturday and Sunday, Democrats said they were "praying for a buyer," said Rep. Brad Sherman (D-Calif.), a member of the House Financial Services Committee. "Big buyer, small buyer, fat buyer, skinny buyer - we need a buyer," he said. "If they have a bunch of buyers, I would argue you take the best offer," he said, noting then they can "quibble about which offer to take."

Officials had grown increasingly alarmed by the prospect that SVB's collapse could lead depositors to move their money out of similarly situated banks and into the safer Wall Street firms.

"They're trying to work out legal and politically justifiable way to protect all uninsured deposits," said one person familiar with the discussions earlier on Sunday.

The decision to provide unusual assistance to SVB's depositors is expected to draw opposition. As discussions continued through Sunday, some experts said that problems at the bank - and others like it - did not pose a threat to the U.S. financial system. That was ultimately the justification cited by Treasury for backstopping all deposits.

"I think it's going to be hard to say that this is systemic in any way," Sheila Bair, former head of the FDIC, said on NBC's "Meet the Press."

The bank's collapse would cost its shareholders and could trigger economic problems for companies that kept large uninsured sums on deposit, said Anil Kashyap, a professor at the University of Chicago's Booth School of Business. But that did not mean the broader financial system would be imperiled as it was during the 2008 crisis.

"This isn't a systemic event. This is a midsize bank that was badly managed," he said. "It may be a little messy. But that's different than if you have somebody at the core of the financial system stop making payments to somebody else at the core of the system and then the core implodes."

The U.S. banking system is highly concentrated, with the top five institutions holding almost $13 trillion in assets. Even if other banks that are comparable in size to SVB suffered depositor runs, the overall financial system would continue to function, he said.

Bob Hockett, a Cornell University professor who worked at the central bank, said the FDIC has the legal means under the "systemic risk exception" of the Federal Deposit Insurance Corporation Improvement Act to intervene.

"That option is still available. If there looks like there could be a bank run on all the non-Jamie Dimon banks, they can, in a pinch, insure previously uninsured deposits for the full amounts," Hockett said. "They can do this for over $250,000 per deposit."

With fears growing that there could be a run on other small or regional banks, some members of Congress also sought to reassure their constituents that their cash is safe. On Sunday, Sen. Joe Manchin III (D-W.Va.) stressed in a statement that the banking system is "stronger and sounder now than any time" since the financial crisis.

"I urge the American people to allow the protections already in place to insure individual deposits and the well-being of local and regional banks, particularly in rural communities like we have in West Virginia, to be fully realized before reacting out of fear and amplifying the problem," he said.