President Joe Biden addressed Americans on Monday morning regarding the recent collapse of Silicon Valley Bank and Signature Bank, the second-largest bank failure in U.S. history.[0] He assured the public that their deposits are safe, and that the banking system is secure.[1]
On Monday morning, President Biden assured Americans that their deposits in the banking system are safe, ensuring that their money will be available when needed.[2] Small businesses all over the nation that have accounts with banks can now feel more at ease, knowing they will be able to meet their financial obligations, such as paying their staff and other bills. This brings a sense of relief not just to the small business owners, but to their employees as well.[3]
The president made it clear that his top priority is to protect the deposits of American workers and small businesses without putting taxpayers at risk.[1] He also said that he will ask Congress and the banking regulators to strengthen the rules for banks to make it less likely that this kind of bank failure will happen again, and to protect American jobs and small businesses.
“No losses will be borne by the taxpayers,” Biden said.[4] I will reiterate that: the citizens will not have to bear any losses. Instead, the money will be sourced from the fees that financial institutions pay into the Deposit Insurance Fund.[5]
Biden also noted that “management of these banks will be fired”, and “investors in the banks will not be protected. They knowingly took a risk. And when the risk didn’t pay off, investors lose their money. That’s how capitalism works.”[1]
Depositors will have access to all of their money starting Monday, the agencies said in a joint statement Sunday evening.[6] The taxpayer will not be responsible for any costs resulting from the settlement of Silicon Valley Bank.[7]
The president concluded his speech with a call to action. Biden stated that it is essential to decrease the possibility of a recurrence.[5] Under the Obama-Biden presidency, measures such as the Dodd-Frank law were implemented on banks like Silicon Valley Bank and Signature Bank in order to prevent a repeat of the 2008 financial crisis.[5] Regrettably, the previous administration reversed certain of these regulations.[5] I plan to urge Congress and the banking regulators to implement stricter regulations for banks in order to minimize the probability of similar bank failures occurring in the future and to protect American jobs and small businesses.
0. “Biden team scrambles to assuage financial and political fears after Silicon Valley Bank failure” CNN, 13 Mar. 2023, https://www.cnn.com/2023/03/13/politics/biden-silicon-valley-bank-politics/index.html
1. “Biden Addresses FDIC Bank Takeovers: ‘The Banking System Is Safe’ – SPDR S&P 500 (ARCA:SPY)” Benzinga, 13 Mar. 2023, https://www.benzinga.com/government/23/03/31320443/biden-addresses-fdic-bank-takeovers-the-banking-system-is-safe
2. “Biden says America’s ‘banking system is safe’ after regulators back up all SVB deposits” FierceBiotech, 13 Mar. 2023, https://www.fiercebiotech.com/biotech/biden-says-americas-banking-system-safe-after-regulators-back-all-svb-deposits
3. “Biden promises ‘your deposits will be there’ amid banks’ collapse” POLITICO, 13 Mar. 2023, https://www.politico.com/news/2023/03/13/biden-silicon-valley-bank-00086745
4. “Biden says “banking system is safe” after Silicon Valley Bank collapse” Axios, 13 Mar. 2023, https://www.axios.com/2023/03/13/biden-says-banking-system-is-safe-after-svb-collapse
5. “Biden stresses taxpayer funds won’t be used in Silicon Valley Bank collapse – live” The Guardian US, 13 Mar. 2023, https://www.theguardian.com/us-news/live/2023/mar/13/silicon-valley-bank-collapse-biden-address
6. “Biden says ‘the banking system is safe’ after Silicon Valley Bank shutdown” NBC News, 13 Mar. 2023, https://www.nbcnews.com/politics/politics-news/biden-deliver-remarks-silicon-valley-bank-shutdown-rcna74622
7. “Silicon Valley Bank customers line up to take money out of Wellesley branch” CBS Boston, 13 Mar. 2023, https://www.cbsnews.com/boston/news/silicon-valley-bank-wellesley-massachusetts-customers-signature-bank-president-joe-biden/