President Joe Biden has sought to allay public concerns about the recent collapse of Silicon Valley Bank (SVB), the largest financial institution to fail since Washington Mutual at the height of the 2008 financial crisis.
In a statement released on Sunday evening, Biden said he was “firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.”[0]
Over the weekend, Treasury Secretary Janet Yellen and National Economic Council Director Shalanda Young worked with banking regulators to address the problems at Silicon Valley Bank and Signature Bank.[1] Janet Yellen reported that over the weekend she had been contacted by numerous depositors, many of whom owned small businesses and employed thousands of individuals.[2]
SVB, which had been the 16th-largest bank in the U.S., failed Friday when depositors rushed to withdraw cash amid worries over the bank’s health.[0] When the panic on Wall Street began due to the run on SVB, causing its stock to plummet, analysts stated that it was unlikely this bank’s failure would lead to the same kind of domino effect that impacted the banking sector in 2008’s economic crisis.[2]
The Treasury Department and the Federal Deposit Insurance Corporation (FDIC) released a joint statement on Sunday evening saying their actions were taken to “strengthen public confidence in our banking system.”[3]
Rep. Ro Khanna, a Democrat from California, said on CBS News’ “Face the Nation” Sunday that the bargain in the U.S. has always been that “investors and shareholders lose” and “the depositors are protected.”[4]
Republican Rep. Nancy Mace of South Carolina told CNN’s Kaitlan Collins in a separate interview on “State of the Union” that she didn’t support a bailout “at this time” but cautioned, “It’s still very early.”[2]
On March 13, Biden shared with his 29.9 million Twitter followers his pleasure that a solution has been reached that will safeguard workers, small businesses, taxpayers, and the economic system.[5]
He added, “The American people and American businesses can have confidence that their bank deposits will be there when they need them.[6]
0. “Biden ‘pleased’ with Feds’ response on Silicon Valley Bank collapse, set to soon address deposits and closures” Fox Business, 13 Mar. 2023, https://www.foxbusiness.com/markets/biden-pleased-feds-response-silicon-valley-bank-collapse-address-deposits-closures
1. “Biden vows to hold accountable those responsible for SVB, Signature collapse” Cointelegraph, 13 Mar. 2023, https://cointelegraph.com/news/biden-vows-to-hold-those-responsible-for-svb-signature-collapse
2. “Biden vows to hold those responsible for Silicon Valley Bank failure ‘fully accountable’” CNN, 13 Mar. 2023, https://www.cnn.com/2023/03/12/politics/janet-yellen-bailout-silicon-valley-bank-cnntv/index.html
3. “Biden announces bailout for wealthy depositors in Silicon Valley Bank” WSWS, 13 Mar. 2023, https://www.wsws.org/en/articles/2023/03/13/pdht-m13.html
4. “Khanna calls on Biden administration to take “decisive action” on Silicon Valley Bank collapse” CBS News, 12 Mar. 2023, https://www.cbsnews.com/news/silicon-valley-bank-collapse-ro-khanna-biden-administration-take-decisive-action/
5. “Statement from President Joe Biden on Actions to Strengthen Confidence in the Banking System” Forex Factory, 13 Mar. 2023, https://www.forexfactory.com/news/1210236-statement-from-president-joe-biden-on-actions-to
6. “US President Biden on SVB rescue: Bank deposit solution avoids putting taxpayer dollars at risk” FXStreet, 13 Mar. 2023, https://www.fxstreet.com/news/us-president-biden-on-svb-rescue-bank-deposit-solution-avoids-putting-taxpayer-dollars-at-risk-202303130139