President Joe Biden on Monday underscored that the American banking system remains safe.
US President Joe Biden, on Monday local time, in a very short speech about the US banking system following the closure of two banks in the country, added: We must understand the full details of what happened and those responsible for this bankruptcy must be held accountable.
The American president stated that the American taxpayers will not be responsible for the losses of the bankrupt bank and claimed that Americans can trust the security of the American banking system. The American banking system is safe and has no problems.
Biden also promised to introduce stricter rules for banks and told the American people: Your bank deposits will be available whenever you need them.
Biden 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. 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 on Monday.
“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.
Treasury officials see positive signs
Treasury Department officials have paid especially close attention to the flows of deposits in the wake of their Sunday actions and have seen signs that deposit outflows from small and midsized lenders have slowed, according to a senior Treasury official.
White House and Treasury Department officials spent the day in regular contact with regulators and bank executives as they monitor the effectiveness of their dramatic emergency actions over the weekend.
While the early reports don’t mean the risks have dissipated, they do signal that a central component of the administration’s strategy – sending a clear message to depositors that their deposits were, in fact, safe – has had an effect.
“The thing we were targeting was uninsured depositors feeling as if they weren’t protected,” the official said. “The scale and the breadth of what we did has sent that message.”
While regional bank stocks have been hammered throughout the day, there’s also some cautious optimism that their efforts are having an effect as Wall Street firms – most notably JPMorgan – have opened up new lines of credit to some of the most at-risk banks.
