After Silicon Valley Bank’s demise, President Joe Biden said early on 13 March Monday that Americans might have “faith” in the banking system to assuage market and taxpayer fears.
In the White House, Biden stated that “Americans can have trust that the banking system is safe. “Your deposits will be available as required.”
According to Biden, the money would come from the fees banks pay into the Deposit Insurance Fund, which claimed that “taxpayers would bear no damages” from the collapse.
Following the bank’s cash shortage, the Federal Deposit Insurance Corporation, or FDIC, assumed custody of SVB’s assets last week. Meanwhile, over the weekend, federal regulators determined that Signature Bank of New York poses a systemic danger and took control of the institution. Biden Monday said bank managers would be fired and investors would not be protected.
The president declared that bank customers, tiny firms that must pay their employees, would have quick access to their money. According to Biden, Americans should know that their deposits will be available if and when needed.
Markets fluctuated as the markets responded to the proposal from federal authorities and Biden’s speech. The Nasdaq closed higher than where it had been earlier, but the Dow Jones Industrial Average and S&P 500 declined.
The fall of Silicon Valley Bank, the second-largest since the financial crisis of 2008, occurred as a result of a run on the bank by failing tech companies, who quickly withdrew cash and put the bank in a situation where it had to sell bonds at a loss to satisfy the withdrawals.
The tweet is posted by USA TODAY about President Joe Biden Says Taxpayer Money Won’t Be Used:
Small businesses across the country that had accounts at Silicon Valley Bank and Signature Bank can breathe easier knowing they will be able to pay their workers.
It won't cost taxpayers a dime.
This is paid for with the fees that banks pay into the Deposit Insurance Fund. pic.twitter.com/1rv949k3X5
— President Biden (@POTUS) March 13, 2023
On Sunday, Treasury Secretary Janet Yellen emphasized that better measures, such as capital and liquidity oversight, had been implemented since the banking system collapsed more than ten years ago.
According to her, the system demonstrated its “resilience” during the coronavirus pandemic, “so Americans can have confidence in the safety and soundness of our banking system,” she said on CBS’ “Face the Nation.”
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To reduce the likelihood of another comparable bank failure and to support the growth of jobs and small companies, Biden said on Monday that he would encourage Congress and banking authorities to tighten the rules for banks further.
Biden stated, “We won’t stop at this.” “We’ll take the necessary action,”
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