In a brief statement Monday addressing the stunning collapse of Silicon Valley Bank and Signature Bank, Joe Biden sought to assure worried Americans that the U.S. banking system is in good hands.
“Thanks to the quick action of my administration over the last few days, Americans can have confidence that the banking system is safe,” Biden said. “Your deposits will be there when you need them.”
As he was speaking, the stocks of four other banks—First Republic Bank, PacWest, Regions and Western Alliance Bancorp—were halted for volatility.
Biden faulted “the previous administration” for rolling back regulations that he claimed would prevented the current banking crisis, and pledged to overhaul the system to “make it less likely this kind of bank failure would happen again and to protect American jobs and small businesses.” Biden didn’t bring up how the massive inflation of the past two years forced the fed to raise interests rates to an unsustainable level.
Biden told customers of SVB and SB that their money was safe, and insisted that the failing banks would not get taxpayer-funded bailouts.
“No losses will be borne by the taxpayers,” he said. “Instead, the money will come from the fees that banks pay into the Deposit Insurance Fund.”
Biden noted that investors in the failed banks’ securities will not have the same guarantee.
“Investors in the banks will not be protected,” Biden said. “They knowingly took a risk and when the risk didn’t pay off, the investors lose their money. That’s how capitalism works.”
Bank regulators announced on Sunday that the Federal Deposit Insurance Corporation and Federal Reserve would somehow fully cover deposits at both failed banks, relying on Wall Street and large financial institutions to foot the bill. Signature Bank in New York, a popular funding source for cryptocurrency companies, was closed on Sunday over similar systemic failures as SVB.
“The FDIC on Friday took control of SVB’s assets and over the weekend Signature’s,” Biden said. “All customers who had deposits in these banks can rest assured they will be protected and they’ll have access to the money as of today.”
Biden also took aim at the executives of the failing banks, declaring that those who mismanaged funds “will be fired.”
“We will do whatever is needed,” Biden added.
Biden boasted that his administration has presided over a “historic economic recovery,” creating over 12 million jobs and keeping the unemployment rate low.
He quickly left the podium following his brief remarks and refused to take any of the shouted questions from reporters.
BREAKING: Western Alliance Bancorp drops lower during President @JoeBiden speech in which he assured Americans the banking sector is safe. Silicon Valley Bank has already collapsed. The problems seem to be spreading. Reporters asked Biden whether there will be a ripple effect and… https://t.co/fUSCwdVUjM pic.twitter.com/82YbaYS5xk
— Simon Ateba (@simonateba) March 13, 2023