US President Joe Biden on Monday said that Americans can retain their confidence on the US banking system after failures and fears of global ripple effects due to the Silicon Valley Bank collapse, news agency AP reported.
President Biden said: “You can have confidence that the banking system is safe. Your deposits will be there when you need them.” “No losses will be borne by the taxpayers. Let me repeat that. No losses will be borne by the taxpayers,” he was quoted as saying by New York Times.
In a five-minute speech, Biden highlighted four points: Avoid panic, No bailout with taxpayers’ money, fixing accountability, action will to avoid such a situation in future.
He also called on the Congress and regulators to strengthen rules on banks after failures.
US Treasury Secretary Janet Yellen had also said earlier that the government will not bail out Silicon Valley Bank (SVB), following its shutdown by regulators last Friday. Yellen said several reforms were introduced after the 2008 financial crisis with the sole aim to prevent any requirement for a bailout by the government.
When asked if the US government will intervene as part of emergency measures in the SVB meltdown issues, particularly with respect to bailout matters, Yellen replied, “America’s economy relies on a safe and sound banking system that can provide for the credit needs of our households and businesses. So whenever a bank, especially one like Silicon Valley Bank with billions of dollars in deposits fails, it’s clearly a concern.”
Earlier, the US government had said that SVB depositors “will have access to all of their money starting Monday (March 13)”. It said that taxpayers won’t be responsible for any losses associated with SVB’s resolution.
WHAT HAPPENED TO SILICON VALLEY BANK?
Silicon Valley Bank (SVB), a major US lender for venture capital-backed companies, was seized by California banking regulators on Friday. The Federal Deposit Insurance Corporation (FDIC) in its order said that the move is aimed “to protect insured depositors”.
The closure of SVB is seen as the largest bank failure since Washington Mutual during the peak of the 2008 financial crisis. The bank failed after depositors, mostly technology workers and venture capital-backed companies, began withdrawing their money from the bank.
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