- In a five-minute speech before leaving for San Diego, the president assured Americans that the US banking system was “safe” and that “no loss will be borne by the taxpayers.”
- Silicon Valley Bank and Signature Bank have been shut down by state regulators in California and New York, respectively, over the past few days in the second biggest bank failure in US history.
- On Monday, Biden said the Obama administration had taken steps to ensure such a failure would not happen again, but “the last administration rolled back some of these requirements.”
President Joe Biden commented briefly on the Silicon Valley Bank (SBV) chaos on Monday, speaking for just five minutes before departing for San Diego, California.
After the weekend’s financial turmoil, Biden on Friday addressed the bank run that closed the SVB as well as Signature’s bank on Sunday, reassuring Americans that the US banking system remains “safe” and “No loss will be done” by the taxpayers. ,
He told customers who had deposits with the two banks that they would be able to access their money as early as Monday, but warned investors that they would not be protected because they “knowingly took a risk.” Biden said he would fire those running the banks and vowed to seek stronger regulations, without specifying how. After his quick speech, the President did not take any questions.
Last week, SVB suffered the second largest bank failure in US history, when state regulators closed the bank and handed it over to the Federal Deposit Insurance Corporation (FDIC). The biggest failure occurred during the 2008 financial crisis with the collapse of Washington Mutual.
Two days after the closure of SVB, Signature Bank was forced to close its doors when state regulators said that keeping the bank open could threaten the stability of the entire financial system.
The President’s remarks suggest that he had no plans to deliver a taxpayer bailout, as was seen after the 2008 crash. Instead, the costs would be financed by fees that banks paid to the FDIC.
While SVB was little known outside of Silicon Valley, it is a major player in the tech sector and has been able to compete successfully with big-name banks. Signature Bank is even less well known, but its closure has implications for SVB results for small or medium banks.
On Monday, Biden said there were “significant questions” about how these banks “got into this situation in the first place.”
He suggested that the Trump administration was partly to blame for the SVB explosion, saying that the Obama administration had taken steps to ensure that the 2008 crisis would not happen again, but “the last administration did some of these requirements.” Took it back.”
Biden’s comments echo criticisms that other top Democrats have made, pointing to Republicans who voted in 2018 to reduce regulatory oversight on SVBs – bipartisan legislation then signed into law by President Donald Trump it was done.
In a Sunday statement, independent Senator Bernie Sanders of Vermont said, “Let’s be clear. The failure of Silicon Valley Bank is a direct result of an absurd 2018 bank deregulation bill signed by Donald Trump that I strongly opposed.”
The Economic Growth, Regulatory Relief, and Consumer Protection Act—which was supported by some Democrats such as Senators Joe Manchin and Tim Kaine—was seen as an important part of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, which Included were rules Trump said were “crushing community banks and credit unions across the country.”
In response, Trump’s campaign has placed the fall of SB on “out-of-control Democrats and the Biden administration”. Speaking to Fox News Digital, Trump campaign spokesman Steven Cheung said the comments were “nothing more than a sadistic attempt to gaslight the public to avoid responsibility.”
Credit: www.newsweek.com /