President Biden Reassures Americans: Banking System is Safe
On Monday, President Joe Biden addressed the nation to reassure Americans that the banking system is safe in the wake of the collapse of Silicon Valley Bank and Signature Bank. The federal government was forced to intervene to backstop deposits at the two banks and the President sought to ease worries that other small regional banks may face similar issues.[0]
“The bottom line is this: Americans can rest assured that our banking system is safe. Your deposits are safe,” Biden said in his remarks at the White House. “Thanks to the quick action in my administration over the past few days, Americans can have confidence that the banking system is safe,” he added. Your funds will be available when you require them.[1]
Biden also said that no losses will be borne by the taxpayers and that the money will come from the fees that banks pay into the government’s Deposit Insurance Fund.[2] He further promised to ask Congress and banking regulators to strengthen the rules for banks to make it less likely that a similar bank failure would happen again.[3]
Silicon Valley Bank is a publicly traded bank based in Santa Clara, Calif. and is considered one of Silicon Valley’s most important banks, working with “nearly half” of all venture-capital backed U.S. start-ups.[1] It was the 16th biggest bank in the U.S. at the start of last week and held around $209 billion in total assets. SVB’s tipping point came Wednesday when it announced it had sold $21 billion worth of its securities at a $1.8 billion loss and needed to raise $2.25 billion to meet clients' withdrawal needs and fund new lending.[4]
Biden’s message was clear: the banking system is safe and the federal government is monitoring the situation to ensure depositors’ money is safe. The President also promised to hold responsible those behind the collapse of SVB and Signature Bank and to strengthen the rules for banks to make it less likely a similar bank failure will happen again.[5]
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 seeks to calm Americans after government intervenes in SVB collapse” The Washington Post, 13 Mar. 2023, https://www.washingtonpost.com/politics/2023/03/13/biden-silicon-valley-bank-federal-regulators/
2. “What to know about FDIC insurance and how your money is protected” ABC News, 13 Mar. 2023, https://abcnews.go.com/Business/money-fdic-protects/story?id=97831935
3. “Amid crisis, Biden tells Americans ‘banking system is safe'” ABC News, 13 Mar. 2023, https://abcnews.go.com/Politics/biden-speaks-banking-crisis/story?id=97820883
4. “Silicon Valley's ‘greed and avarice' have ‘finally come home to roost' in SVB collapse, trader says” CNBC, 13 Mar. 2023, https://www.cnbc.com/2023/03/13/svb-collapse-silicon-valleys-greed-and-avarice-to-blame-trader-says.html
5. “Bloomberg Evening Briefing: Bank Deregulation Blamed for SVB Blowup” Bloomberg, 13 Mar. 2023, https://www.bloomberg.com/news/newsletters/2023-03-13/bloomberg-evening-briefing-bank-deregulation-blamed-for-svb-blowup
