Biden Assures Americans of Safe Banking System After Silicon Valley Bank Collapse
President Joe Biden has assured Americans that the banking system is safe and their deposits will be there when they need them, following the collapse of Silicon Valley Bank.[0] In a statement from the White House, Biden assured the public that small businesses across the country who deposit accounts with these banks can “breathe easier, and their workers can rest assured their wages will be paid.
The president said he will ask Congress and regulators to strengthen the rules for banks to make it less likely that a similar bank failure will happen again.[1] He also said “no losses will be borne by the taxpayers and instead the money will come from fees that banks pay into the Deposit Insurance Fund.[2]
The 40-year-old Silicon Valley Bank had roughly $209 billion in total assets and about $174.5 billion in total deposits, according to the FDIC.[3] Since Washington Mutual's downfall during the 2008 financial crisis, it has been the most substantial financial institution to fail.[4]
Treasury Secretary Janet Yellen ruled out a federal bailout for Silicon Valley Bank’s investors, telling “Face the Nation” in an interview that “we're not going to do that again.[5]
The Biden administration also announced Sunday that depositors with accounts at Silicon Valley Bank will have access to all of their money beginning Monday, and “no losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
Biden also vowed to hold those responsible for the Silicon Valley Bank failure “fully accountable and to continue efforts to strengthen oversight and regulation of larger banks.[6] HSBC has since scooped up the UK arm of the failed Silicon Valley Bank, securing the future of thousands of British tech firms that hold money at the lender.[7]
Despite initial panic on Wall Street over the run on Silicon Valley Bank, which caused its shares to crater, analysts said the bank’s collapse is unlikely to set off the kind of domino effect that gripped the banking industry during the financial crisis.[8] As such, the Biden administration has moved to contain the crisis and ensure that customers of Silicon Valley Bank and Signature Bank have full access to their deposits, even if their account totals were above the maximum $250,000 covered by federal insurance.
0. “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
1. “Biden speaks on banking crisis hoping to reassure Americans” ABC News, 13 Mar. 2023, https://abcnews.go.com/Politics/biden-speaks-banking-crisis/story?id=97820883
2. “‘Banking system is safe’: Joe Biden reassures markets in address on Silicon Valley Bank collapse – live updates” The Guardian US, 13 Mar. 2023, https://www.theguardian.com/us-news/live/2023/mar/13/silicon-valley-bank-collapse-biden-address
3. “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/
4. “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
5. “Biden stresses that Silicon Valley Bank is not getting a bailout” The Hill, 13 Mar. 2023, https://thehill.com/homenews/administration/3897534-biden-stresses-that-silicon-valley-bank-is-not-getting-a-bailout/
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. “HSBC acquires Silicon Valley Bank UK Limited” HSBC, 13 Mar. 2023, https://www.hsbc.com/news-and-media/media-releases/2023/hsbc-acquires-silicon-valley-bank-uk-limited
8. “Biden vows to hold those responsible for Silicon Valley Bank failure ‘fully accountable'” KTVZ, 13 Mar. 2023, https://ktvz.com/politics/cnn-us-politics/2023/03/12/treasury-secretary-rules-out-bailout-for-silicon-valley-bank-2/
