US President Joe Biden
President Biden said Monday that the banking system is secure, emphasizing measures taken to limit the fallout from Silicon Valley Bank’s failure and restore trust in the financial system.
“Thanks to my administration’s quick action over the last few days, Americans can have faith in the financial system”, Mr. Biden said in live comments.
Mr. Biden’s comments came just one day after federal regulators revealed emergency steps to ensure all depositors with money at Silicon Valley Bank after its collapse, rather than the usual $250,000 in insured accounts.
Federal regulators stated that any losses to the government’s fund would be recovered through a special charge on banks, with no losses borne by US citizens.
On Friday, regulators seized control of SVB, and on Sunday, they announced the takeover of a second lender, Signature Bank, one of the most important banks for bitcoin businesses. Officials went out of their way to designate SVB and Signature Bank as a systemic danger to the financial system, giving regulators the ability to ensure uninsured assets.
President Biden stated that deposits in SVB and Signature were secure, that clients would have access to their money beginning Monday, and that taxpayers would bear no losses.
He further said that he would urge Lawmakers and banking authorities to strengthen bank regulations in order to make it less likely that this type of bank failure would occur again.
“We need a complete accounting of what occurred and why”, Mr. Biden said so that those culpable can be held liable.
“There is no one above the law”, he added.
President Biden went on to say that bank investors would not be shielded, and that management would be changed. He said they deliberately took a chance and when the risk didn’t pay off, investors lose their money. That is how capitalism operates.
Following a volatile morning, US equities rose. Bank equities continued to fall, as buyers sought refuge in government bonds.
HSBC announced on Monday that it would purchase SVB’s UK subsidiary for a symbolic £1 in a transaction brokered by the British government and the Bank of England and that SVB UK users will be able to access their savings and financial services as usual.
