President Joe Biden on Monday told Americans the nation’s financial systems were safe, seeking calm following the swift collapse of two banks that prompted fears and spooked investors.
“Americans can have confidence that the banking system is safe,” 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’ll be able to pay their workers and pay their bills, and their hard-working employees can breathe easier as well.”
The comments came as the Federal Reserve said it will begin a review of the collapse of Silicon Valley Bank with results to be publicly released by May 1, the central bank said on Monday.
Two U.S. banks — Silicon Valley Bank and Signature Bank — collapsed this weekend, leading customers to rush to withdraw funds, sparking the crisis. Silicon Valley Bank now stands as the second-largest bank failure in U.S. history, after the 2008 collapse of Washington Mutual Bank.
Biden reiterated that “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.
Investors in the banks, however, will not be protected, the president said, and management will be fired. “They knowingly took a risk, and when the risk didn’t pay off, investors lose their money. That’s how capitalism works,” Biden said.
The president also called for a “full accounting” of what led to the collapse of Silicon Valley Bank and a second institution, Signature Bank of New York, and how to hold those responsible accountable. “No one is above the law,” Biden said.
