Washington: President Joe Biden has underscored that the American banking system remains safe, laying out how his administration is taking action to contain Silicon Valley Bank’s collapse.
“Americans can rest assured that our banking system is safe. Your deposits are safe,” Biden said from the Roosevelt Room. “Let me also assure you we will not stop at this. We will do whatever is needed on top of all this.”
Biden used his speech – which was only announced Sunday night – to allay fears, directly explaining what he has instructed his administration to do to protect small businesses and workers in the wake of regulator shutdowns of both Silicon Valley Bank and Signature Bank over the last few days, CNN reported.
These actions include backstopping depositors’ funds, making sure taxpayers are not on the hook for these moves, holding those responsible accountable and declining to extend relief to investors of Silicon Valley Bank.
The president said affected customers can “rest assured” that they will have access to their money.
“Management of these banks will be fired. If the bank is taken over by FDIC, the people running the bank should not work there anymore,” Biden said, adding that investors in the banks will “not be protected” because they knowingly took a risk.
The president also said there must be a “full accounting” of how this situation happened and steps must be taken to ensure this “never happens again.”
“In my administration … no one is above the law,” Biden said, before calling on Congress to restore banking regulations rolled back during the Trump administration.
The chaos instigated by high interest rates led to the old-fashioned bank run last Thursday, in which depositors yanked $42 billion from Silicon Valley Bank.
SVB provided financing for almost half of US venture-backed technology and health care companies. At the end of 2022, the bank said it had $151.5 billion in uninsured deposits, $137.6 billion of which was held by US depositors.