President Joseph Biden said this morning that, thanks to his administration's swift action in recent days, "Americans can trust that the banking system is safe" and that "their deposits will be there when they need them" following the bankruptcy of SVB.
Following the collapse of Silicon Valley Bank's shares last Friday, which generated uncertainty in the country's financial system, Signature Bank also reported its collapse.
"Small businesses across the country that had deposit accounts at these banks can breathe easy knowing that they will be able to pay their workers and pay their bills. And their workers can breathe easy, too," Biden said at a press conference.
The president explained that last week, upon learning of the problems facing the banks and the impact they could have on employment, on some small businesses and on the banking system in general, he gave instructions to act quickly and protect those interests.
He also explained that the government regulator in charge, the Federal Deposit Insurance Corporation (FDIC), took control of the assets of Silicon Valley Bank last Friday and those of Signature Bank over the weekend.
According to the report, the Secretary of the Treasury, Janet Yellen, and a team of banking regulators have taken immediate measures, including the protection of customer deposits and access to them starting today, which includes small businesses.
“Taxpayers will not suffer any losses, and this is an important point. Let me repeat: Taxpayers will not suffer any losses. Instead, the money will come from fees that banks pay to the Deposit Insurance Fund,” President Biden said.
"Thanks to the steps our regulators have already taken, all Americans can rest assured that their deposits will be there when they need them," he added.
He said the management of both banks will be fired and that if the FDIC takes over the bank, the people who run it would no longer have to work there, while investors would not be protected because, he said, they took a risk knowing it was not worth it. “Investors lost their money. That’s how capitalism works.”
Finally, he said that both banks must provide a full explanation of what happened.
Biden recalled that during the Obama-Biden administration, strict requirements were imposed on banks such as Silicon Valley Bank and Signature Bank, including the Dodd-Frank Act, to ensure that the crisis experienced in 2008 would not be repeated.
“Unfortunately, the last administration – the Trump administration – has removed some of these requirements. I will ask Congress and banking regulators to strengthen the rules for banks to make it less likely that this type of bank failure will happen again and to protect American jobs and small businesses.”
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