President Joe Biden reassured Americans that the nation’s banking system is safe after Silicon Valley Bank collapsed last week and said there would be accountability for financial executives.
The president’s actions come after the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation announced on Sunday evening that depositors for Silicon Valley Bank would have access to their money on Monday.
“No losses, and this is an important point, no losses will be borne by the taxpayers,” the president said. “Instead the money will come from the fees that banks pay into the deposit insurance fund.”
In addition, the FDIC took control of the assets of Signature Bank, based in New York, on Sunday. The president said that Americans should feel confident that their money would be available when they need it.
“Thanks to the quick action of my administration over the past few days, Americans can have confidence that the banking system is safe,” Mr Biden said. “Deposits will be there when you need them. Small businesses across the country that deposit accounts at these banks can breathe easier knowing they can pay their workers and pay their bills.”
The president also said that the management of the banks would be fired.
“If the bank is taken over by FDIC, the people running the bank should not work there anymore,” Mr Biden said.
In addition, he added that Silicon Valley Bank’s investors would not be protected.
“They knowingly took a risk and when the risk didn’t pay off, investors lose their money,” he said. “That’s how capitalism works.”
Mr Biden also called for an accounting of how Silicon Valley Bank collapsed and why the people responsible for its unraveling could be held accountable.
“And finally, we must reduce the risk of this happening again,” Mr Biden said.
Mr Biden highlighted former president Donald Trump’s loosening of regulations that the Obama administration put in place after the 2008 financial crisis.
“Unfortunately, the last administration rolled back some of these requirements,” he said. “I’m going to ask Congress and the banking regulators to strengthen the rules for banks to make it less likely this type of bank failure would happen again and to protect American jobs and small businesses.”