Biden Assures Bank Deposits are Safe After Silicon Valley Bank Collapse
On Friday morning, Silicon Valley Bank (SVB) became the second-largest financial institution to fail in US history after 48 hours of a bank run and a capital crisis. President Joe Biden assured Americans that their deposits are safe and vowed to hold those responsible for the failure fully accountable.
Biden said in a statement that he directed the Treasury Department and the National Economic Council to address the failures of Silicon Valley Bank and Signature Bank. He added that the solution will protect American workers and small businesses, and keep the financial system safe, without putting taxpayer dollars at risk.
“The American people and American businesses can have confidence that their bank deposits will be there when they need them,” Biden said.
Treasury Secretary Janet Yellen said she’s been hearing from depositors all weekend, many of whom are “small businesses” and employ thousands of people. “I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation,” Yellen said, declining to provide further details.
Shalanda Young, the director of the White House Office of Management and Budget, stressed in a Sunday interview with CNN’s Kaitlan Collins that the US banking system at large was “more resilient” now due to reforms put in place.
Republican Rep. Nancy Mace of South Carolina said she doesn’t support a bailout “at this time” but cautioned, “It’s still very early.” She added that “we cannot keep bailing out private companies because there’s no consequences to their actions. People, when they make mistakes or break the law, have to be held accountable in this country.”
SVB had been the 16th-largest bank in the U.S. with $209 billion in total assets and about $174.5 billion in total deposits, according to the FDIC. It catered for the financial needs of technology companies around the world, before a series of ill-fated investment decisions led to its collapse.
Analysts said the bank’s collapse is unlikely to set off the kind of domino effect that gripped the banking industry during the 2008 financial crisis. In Washington, the repercussions of the collapse have sparked a debate over the need for a bailout.
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