President Joe Biden addressed the U.S. following the collapse of Silicon Valley Bank (SVB). It comes as the U.S. government is taking steps to try and prevent an escalating financial crisis.
Biden said that “Americans can rest assured that our banking system is safe, your deposits are safe” after the collapse of Silicon Valley Bank.
Biden promised to do “whatever is needed” to prevent any additional bank runs.
Biden added that he will ask Congress and banking regulators to strengthen the rules for banks to “make it less likely this kind of bank failure would happen again.”
He also vowed a “full accounting” of how the collapse happened and said that the management of banks being taken over by the FDIC will be fired.
On Friday, California regulators shut down Silicon Valley Bank (SVB) as depositors concerned about the institution’s balance sheet rushed to withdraw their money, creating a bank run.
It marked the biggest U.S. bank collapse since Washington Mutual failed during the height of the 2008 global financial crisis.
New York-based Signature Bank – one of the biggest banks in the cryptocurrency industry – was also shut down by regulators.
New York state regulators on Sunday shut down Signature Bank, a big lender in the crypto industry, in a bid to prevent the spreading banking crisis.
“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority,” the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corp. said in a joint statement Sunday evening.
Biden said he will ask Congress to strengthen the rules for banks, speaking about possible measures to prevent similar crises from happening again. He spoke of the requirements put in place during the Obama-Biden administration, and he criticized the Trump administration for rolling some of them back.
His economic team worked with regulators over the weekend on the measures, which included guaranteeing deposits in both banks, setting up a new facility to give banks access to emergency funds, and making it easier for banks to borrow from the Federal Reserve in emergencies.