On Monday, President Joe Biden reassured Americans that the banking system is safe and that their deposits will be there when they need them. The president’s remarks come after the collapse of Silicon Valley Bank last week, the second-largest bank failure in U.S. history.
The Biden administration and federal regulators announced Sunday that depositors of Silicon Valley Bank would be fully protected, even those that weren’t insured.[0] The same protections would be in place for customers of Signature Bank, which failed Sunday, becoming the third largest bank failure of all time behind SVB.[0]
The U.S. Treasury, Federal Reserve and the FDIC said that the money will come from fees paid by banks into the Deposit Insurance Fund, and that no losses will be borne by taxpayers.[1] In his remarks Monday morning, Biden said he would ask Congress and the banking regulators to strengthen the rules for banks to make it less likely that a similar bank failure happens again and to help project jobs and small businesses.
“Let me also assure you, we will not stop at this. We’ll do whatever is needed,” Biden said.[2]
The president 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.”[3]
Treasury Secretary Janet Yellen ruled out a bailout for Silicon Valley Bank’s investors in an interview on CBS News’ Face the Nation Sunday, saying the focus is on helping the depositors.[4]
HSBC has since scooped up the UK arm of failed Silicon Valley Bank, securing the future of thousands of British tech firms that hold money at the lender.[5]
Biden’s remarks seek to reassure Americans that the banking system is safe and that their deposits will not be at risk. The president also said he will ask Congress and the banking regulators to strengthen the rules for banks to make it less likely that a similar bank failure happens again and to help protect American jobs and small businesses.
0. “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
1. “Banking crisis: President Joe Biden says taxpayer funds won’t be used to bail out SVB, Signature bank” Yahoo Sports, 13 Mar. 2023, https://sports.yahoo.com/amphtml/banking-crisis-president-joe-biden-132320292.html
2. “Biden says ‘our banking system is safe’ amid Silicon Valley Bank fallout” The Hill, 13 Mar. 2023, https://thehill.com/homenews/administration/3897516-biden-says-our-banking-system-is-safe-amid-silicon-valley-bank-fallout/
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. “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/
5. “HSBC buys SVB’s UK business, ending ‘nightmare’ for British tech” CNN, 13 Mar. 2023, https://www.cnn.com/2023/03/13/investing/svb-uk-business-deal-intl-hnk/index.html