Biden Reassures Americans: Banking System is Safe and No Taxpayer Money Lost
President Joe Biden sought to reassure Americans on Monday that the banking system is safe following the collapse of Silicon Valley Bank and Signature Bank, both based in the United States. The federal government had to intervene to backstop deposits at both banks, leading to worries about the security of other regional banks.[0]
“Americans can have confidence that the banking system is safe. Your deposits will be there when you need them,” Biden said at the White House.
He added that management of the failed banks will be fired, and investors will not be protected.[1] “They knowingly took a risk, and when the risk didn’t pay off, investors lose their money. That’s how capitalism works,” Biden said.[2]
The President also said that no losses would be borne by taxpayers, with the money coming from the fees that banks pay into the Deposit Insurance Fund.[3] In addition, he has asked 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 protect American jobs and small businesses.
Janet Yellen, the treasury secretary, also commented on the bank failure, saying, “Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out, and we’re certainly not looking (to do that)”.[4]
Biden said the government will get a full accounting of what led to the shutdown of Silicon Valley Bank and “why those responsible can be held accountable.”[5] He also noted that the Obama-Biden administration had put in place tough requirements on banks, including the Dodd-Frank law, to make sure the crisis of 2008 would not happen again.[6] However, the last administration rolled back some of these requirements.[6]
The President concluded by saying he would ask Congress and the banking regulators to strengthen the rules for banks to make it less likely this kind of bank failure would happen again and to protect American jobs and small businesses.
0. “Biden says banking system safe after two banks fail in a matter of days” CBS News, 13 Mar. 2023, https://www.cbsnews.com/video/biden-says-banking-system-safe-after-two-banks-fail-in-a-matter-of-days/
1. “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/
2. “Biden Says Saving Silicon Valley Bank Helped Economy ‘Breathe Easier’—But Not All Experts Agree” Forbes, 13 Mar. 2023, https://www.forbes.com/sites/dereksaul/2023/03/13/biden-says-saving-silicon-valley-bank-helped-economy-breathe-easier-but-not-all-experts-agree
3. “Silicon Valley Bank: Biden Says U.S. Banking System Is ‘Safe' After Major Scares” The Daily Beast, 13 Mar. 2023, https://www.thedailybeast.com/silicon-valley-bank-biden-says-us-banking-system-is-safe-after-major-scares
4. “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
5. “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
6. “Biden stresses taxpayer funds won’t be used in Silicon Valley Bank collapse – as it happened” The Guardian US, 14 Mar. 2023, https://www.theguardian.com/us-news/live/2023/mar/13/silicon-valley-bank-collapse-biden-address
