Biden Reassures Americans: Banking System is Safe and Deposits are Protected
Americans can rest assured that the banking system is safe, according to President Joe Biden. He made these remarks Monday morning after the collapse of Silicon Valley Bank and Signature Bank raised concerns of a full-blown banking crisis.
The president asked Congress, the banking regulators, and the FDIC to strengthen the rules for banks to make it less likely that this kind of bank failure would happen again. He also reassured Americans that their deposits will be safe and that no losses will be borne by the taxpayers. Instead, the money will come from the fees that banks pay into the Deposit Insurance Fund.
Biden also emphasized that investors in the banks will not be protected and that they knowingly took a risk when they invested. He said, “When the risk didn’t pay off, investors lose their money. That’s how capitalism works.”
The president’s remarks come after the Treasury Department, Federal Reserve, and FDIC announced that depositors of SVB will be fully protected and have access to their money starting Monday.
Shalanda Young, the director of the White House Office of Management and Budget, also sought to ease public concerns by stressing that the US banking system at large was “more resilient” now due to the reforms put in place since the 2008 financial crisis.
The president also vowed to hold those responsible for the failure of Silicon Valley Bank “fully accountable” and to continue efforts to strengthen oversight and regulation of larger banks. He said, “If the bank is taken over by FDIC, the people running the bank should not work there anymore.”
Overall, the president’s speech was designed to reassure Americans that the banking system is safe and that their deposits will be protected. His administration also promises to not put taxpayer dollars at risk while simultaneously holding those responsible accountable.
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1. “Biden says Americans should ‘feel confident’ in banking system after federal response to SVB collapse” Fox News, 13 Mar. 2023, https://www.foxnews.com/politics/biden-americans-confidence-banking-system-federal-response-svb-collapse
2. “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
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