Biden says Americans can “rest assured” banking system is safe after SVB collapse

washington — President Biden on Monday tried to reassure Americans that they can have confidence in the US banking system Collapse of the Silicon Valley Bank and quell any concerns about the consequences of his sudden failure.

“Americans can have confidence that the banking system is safe,” Biden said in brief remarks from the White House. “Your insoles are there when you need them. Small businesses across the country that have accounts with these banks can breathe easier knowing they can pay their workers and pay their bills, and their hard-working employees can breathe easier too.”

The president’s comments came after US banking regulators spent the weekend work on a plan to bolster public confidence in the soundness of the financial system and limit spillovers following last week’s closure of Silicon Valley Bank.

Biden administration The officials announced on Sunday that depositors with accounts at Silicon Valley Bank will have access to all of their money starting Monday and “no losses related to the dissolution of Silicon Valley Bank will be borne by the taxpayer.”

US President Joe Biden addresses the banking system in the Roosevelt Room of the White House on March 13, 2023 in Washington, DC.

Anna Moneymaker/Getty Images

The emergency measure “fully protects” all depositors, said Treasury Secretary Janet Yellen, Federal Reserve Board Chair Jerome Powell and Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg.

Mr. Biden reiterated during his remarks that “no losses will be borne by taxpayers,” saying the money will instead come from fees banks pay into the deposit insurance fund.

“Every American should be able to rely on their insoles being there when they need them,” he said.

However, investors in the banks would not be protected, the president said, and management would be fired.

“They knowingly took a risk, and if the risk doesn’t pay off, investors lose their money. That’s how capitalism works,” said Mr. Biden.

The president also called for a “full accounting” of what led to the collapse of Silicon Valley Bank and a second institution, Signature Bank of New York, which was taken over by state regulators on Sunday, and how those responsible will be held accountable can.

“No one is above the law,” Biden said.

Special Report: Biden addresses banking issues after collapse of Silicon Valley Bank and Signature Bank

The president said he intends to ask Congress and banking regulators to tighten rules on banks to stave off future failures.

“Americans can rest assured that our banking system is secure. Your deposits are safe,” he said. “Let me also assure you that we will not stop there. We will do whatever is necessary.”

Mr. Biden spoke at the White House before traveling to San Diego, California, for meetings with Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak.

California regulators shut down Silicon Valley Bank Friday after Depositors rushed to withdraw funds last week due to concerns about its balance sheet, and the FDIC was appointed receiver.

Silicon Valley Bank, which was 40 years old and ranked as the 16th largest bank in the US, catered primarily to the technology industry and was used by many startups and venture capital firms. It is the largest financial institution to collapse since Washington Mutual collapsed at the height of the financial crisis in 2008.

In addition to supporting federal government deposits at Silicon Valley Bank and Signature Bank, the Fed announced it is launching a new emergency lending program called the Bank Term Funding Program “to ensure banks are able to meet everyone’s needs.” their depositors.”

The FDIC runs the day-to-day operations of Signature Bank, New York Gov. Kathy Hochul said Monday, and all deposits, including those above the agency’s $250,000 insurance limit, will be protected.

“Our view has been to ensure that the entire banking community is stable here in New York, that we can project calm, that this is a time when we can manage a certain tight situation and ensure that doesn’t get worse. ” She said.

Hochul said Signature Bank’s closure “didn’t happen in a vacuum,” but rather was the impact of depositors watching what was happening at Silicon Valley Bank.

Yellen ruled out a government bailout for Silicon Valley Bank investors. say face the nation in an interview: “We won’t do that again.”

The president said in a statement Sunday that the steps agreed by his administration and banking regulators are protecting American workers and small businesses and safeguarding our financial system.

“The solution also ensures that taxpayers’ money is not put at risk,” he said. “The American people and American companies can have confidence that their bank deposits will be there when they need them.”

Leave a Reply

Your email address will not be published. Required fields are marked *