Washington – On Monday, President Biden sought to reassure Americans that they can still trust the American banking systemand allay any fears about the fallout from her sudden failure.
“Americans can be confident that the banking system is safe,” Biden said in brief remarks from the White House. “Your deposits will be there when you need them. Small businesses across the country that have deposit accounts with these banks can breathe easy knowing they’ll be able to pay their workers and pay their bills, and their hard-working employees can breathe easy where they’re ok.”
The president’s remarks came after US bank regulators had a weekend awayTo boost public confidence in the soundness of the financial system and limit spillovers after the closing of Silicon Valley Bank last week.
Biden administrationDepositors with accounts with Silicon Valley Bank will have access to all of their funds starting Monday, and “no losses associated with Silicon Valley Bank’s decision will be incurred by the taxpayer.”
Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell, and FDIC Chairman Martin Gruenberg said the emergency measure “fully protects” all depositors.
Mr. Biden reiterated during his remarks that “taxpayers will not take any losses,” and said the money would instead come from fees paid by banks into the Deposit Insurance Fund.
“Every American should feel confident that their deposits will be there if and when they need them,” he said.
The president said that investors in banks would not be protected, and the administration would be fired.
“They took risks on purpose, and when that risk doesn’t pay off, investors lose money. That’s how capitalism works,” Biden said.
The president also called for a “full accounting” of what led to the collapse of the Silicon Valley bank and a second institution, Signature Bank of New York, which state regulators seized on Sunday, and how to hold those responsible to account.
“No one is above the law,” Biden said.
The president said he intends to ask Congress and banking regulators to strengthen rules for banks to stave off future failures.
“Americans can rest assured that our banking system is safe. Your deposits are safe,” he said. “Let me also assure you that we will not stop there. We will do whatever is required.”
Mr. Biden spoke at the White House before flying to San Diego, California, for meetings with Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak.
California regulators shut down the Silicon Valley bank on Friday after thatlast week due to concerns about its balance sheet, and the FDIC was designated as the recipient.
The Silicon Valley bank, which was 40 years old and ranked 16th in the US, largely catered to the technology industry and was used by many startups and venture capital firms. It is the largest financial institution to fail since Washington Mutual at the height of the financial crisis in 2008.
In addition to the federal government’s support for deposits at Silicon Valley Bank and Signature Bank, the Fed announced that it stands at a level The new emergency lending programnamed Bank Term Financing Program, “to help assure banks have the ability to meet the needs of all depositors.”
New York Gov. Kathy Hochul said the FDIC manages the day-to-day operations of the signature bank, and all deposits will be protected, including those over the agency’s insurance cap of $250,000.
“Our point was to make sure that the entire banking community here in New York is stable, that we can calm down, that this is when we can manage a certain tight situation and make sure that it doesn’t get any worse,” she said.
The closing of the Signature Bank “didn’t happen in a vacuum,” Hochul said, rather it was the influence of depositors keeping an eye on what happened at the Silicon Valley bank.
Yellen ruled out a federal bailout for Silicon Valley bank investors,In an interview, “We’ll Never Do It Again.”
The president said in a statement Sunday that the steps agreed upon by his administration and banking regulators protect American workers and small businesses and keep our financial system safe.
“The solution also ensures that taxpayers’ money is not put at risk,” he said. “The American people and American businesses can be confident that their bank deposits will be there when they need them.”
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