WASHINGTON — President Joe Biden attempted to calm market and taxpayer jitters on Monday morning, saying that Americans can have “confidence” in the banking system after the collapse of Silicon Valley Bank.
“Americans can have confidence that the banking system is safe,” Biden said at the White House. ‘Your deposits will be there when you need them.”
Biden said “no losses” would be born by taxpayers, and the money would come from the fees that banks pay into the Deposit Insurance Fund.
Federal regulators also assessed over the weekend that Signature Bank of New York presents a systemic risk and said they were taking it over. Biden said Monday that managers of the banks would be fired, and investors would not be protected.
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Dow Jones Industrial Average fell 150 points on Monday morning as the markets reacted to Biden’s speech and federal regulators’ plan.
Silicon Valley Bank’s failure is the second largest since the 2008 financial crisis and came after struggling tech companies made a run on the bank, withdrawing cash at a rapid pace and forcing the bank into a position where it had to sell bonds at a loss to cover the withdrawals.
Treasury Secretary Janet Yellen stressed Sunday that since the banking system’s failure, better controls are in place, including capital and liquidity supervision. She said on CBS’ “Face the Nation” that the system proved its “resilience” during the coronavirus pandemic, “so Americans can have confidence in the safety and soundness of our banking system.”
Francesca Chambers is a White House Correspondent for USA TODAY. Follow her on Twitter @fran_chambers.