Biden says Americans can "rest assured" banking system is secure after SVB collapse
Washington — President Biden on Monday sought to reassure Americans that they can have confidence in the U.S. banking system following the collapse of Silicon Valley Bank and quell any concerns about the fallout from its abrupt failure.
"Americans can have confidence that the banking system is safe," Mr. Biden said in brief remarks from the White House. "Your deposits will be there when you need them. Small businesses across the country that deposit accounts at these banks can breathe easier knowing they're able to pay their workers and pay their bills."
The president's comments came after U.S bank regulators spent the weekend working on a plan to reassure the public of the soundness of the financial system and limit spillover effects following the closing of Silicon Valley Bank last week.
Biden administration officials announced Sunday that depositors with money at Silicon Valley Bank will have access to all of their money beginning Monday, and "no losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."
The emergency action "fully protects" all depositors, Treasury Secretary Janet Yellen, Federal Reserve Board Chair Jerome Powell and FDIC Chairman Martin Gruenberg said.
Mr. Biden reiterated "no losses will be borne by the taxpayers," and said the money will instead come from fees that banks pay into the Deposit Insurance Fund.
"Every Americans should feel confident that their deposits be there if and when thy need them," he said.
Mr. Biden spoke at the White House before traveling to San Diego, California, for meetings with Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak.
California regulators shut down Silicon Valley Bank Friday after depositors rushed to withdraw money last week due to concerns about its balance sheet, and the Federal Deposit Insurance Corporation (FDIC) was appointed receiver.
Silicon Valley Bank, which was 40 years old and ranked as the 16th largest bank in the U.S., catered largely to the tech industry and was used by many start-ups and venture capital firms. It is the largest financial institution to collapse since Washington Mutual at the height of the financial crisis in 2008.
In an effort to bolster confidence in the banking system, Biden administration officials announced Sunday that depositors with money at Silicon Valley Bank will have access to all of their money beginning Monday, and "no losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."
The emergency action "fully protects" all depositors, Treasury Secretary Janet Yellen, Federal Reserve Board Chair Jerome Powell and FDIC Chairman Martin Gruenberg said.
The officials also revealed that a second bank, Signature Bank of New York, was closed by state authorities. All depositors of that bank will also be made whole, banking officials said.
The Fed also announced it is standing up a new emergency lending program, called the Bank Term Funding Program, "to help assure banks have the ability to meet the needs of all their depositors."
Treasury Secretary Janet Yellen ruled out a federal bailout for Silicon Valley Bank's investors, telling "Face the Nation" in an interview that "we're not going to do that again."
The president said in a statement Sunday that the steps agreed to by his administration and banking regulators protects American workers and small businesses, and keeps our financial system safe."
"The solution also ensures that taxpayer dollars are not put at risk," he said. "The American people and American businesses can have confidence that their bank deposits will be there when they need them."