Following the failure of Silicon Valley Bank, President Joe Biden has done his best to assure Americans that “the banking system is safe.” Conversely, the closure of SVB Financial represents the largest banking failure since 2008.
To make matter worse, the Federal Reserve announced a bailout for SVB depositors. Moreover, Biden has addressed the federal action and why these steps are different from the banking crisis measures taken during the previous financial crisis.
Biden Addresses SVB Failure
It was a sudden and unexpected closure that shook the financial sector. As Silicon Valley Bank was closed at the trial end of last week, representing what is the largest banking failure since the 2008 financial crisis. Subsequently, Signature Bank has closed, creating rightful panic over what this could mean for the industry in the coming weeks.
Now, President Joe Biden has addressed the situation and said “the banking system is safe,” in response to an overwhelming concern. Specifically, Biden has addressed the situation behind the collapse, and why the steps taken by the Federal Reserve to protect depositors differ from those taken in 2008.
The Kobeissi Letter took to Twitter to summarize the remarks. Moreover, Biden was quoted as noting that taxpayers will not bear the burden of SVB losses, differing from 2008. Additionally, the president called on congressional action to “strengthen bank rules,” while noting that investors in banks will remain unprotected.
Ultimately, Biden stated the government “will not stop at this, will do whatever is needed,” while affirming that the banking system is safe. Conversely, the president turned his attention to the systemic operations that caused the failure. As Twitter user @gurgavin noted Biden saying those running troubled banks should be fired.
Conclusively, Biden stated they need the full accounting of what happened at both banks while saying regulators were quick to act against them. Conversely, it remains vital that the bailout of SVB doesn’t cause a fear that 2008 will arrive once again.