The President of the United States, Joe Biden, today (Monday) referred to the collapse of the Silicon Valley Bank, and in an address to the citizens of the United States he stated that the country’s financial systems are sound. After the rapid collapse of two large banks in the country, there was fear of a wider upheaval.
“Americans can have confidence that the banking system is safe,” he said from the Roosevelt Room, before traveling to the western US. “Your deposits will be there when you need them.”
US regulators shut down Silicon Valley Bank (SVB) on Friday after it experienced a “bank run”, in which depositors rushed to withdraw their money all at once. It is the second biggest bank failure in US history, behind only Washington Mutual in 2008 . As an illustration of how quickly the financial “hemorrhage” occurred, regulators announced that New York’s Signature Bank also failed.
Biden, speaking from the Roosevelt Room shortly before US markets opened, said he wanted to get to the bottom of those responsible for the collapse, pressed for better supervision and regulation of larger banks and promised that taxpayers would not bear the losses.
The U.S. and U.K. governments have both taken extraordinary steps to avert a potential banking crisis. U.S. regulators worked over the weekend to find a buyer for SVB, which held more than $200 billion in assets and catered to tech startups, venture capital firms and technology salaried workers Good. Although those efforts appear to have failed, officials assured all bank customers that they would be able to access their money on Monday.
The Bank of England and Britain’s Treasury said earlier today they had cleared the sale of Silicon Valley Bank’s London subsidiary to HSBC, Europe’s biggest bank, guaranteeing the collateral of 6.7 billion pounds ($8.1 billion) of deposits.
The promises came as part of a broad program of emergency loans designed to prevent a wave of bank runs that would threaten the stability of the banking system and the economy as a whole.
