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After Silicon Valley Bank’s demise, President Joe Biden said in remarks that People may have “faith” in the banking system, in an effort to assuage market and taxpayer anxieties.
“Americans can trust that the financial system is secure. You’ll have access to your deposits when you need them “From the White House, Biden remarked.
According to Biden, the money would come from the fees that banks pay into the Deposit Insurance Fund and “no losses” would be borne by taxpayers.
Also, over the weekend, federal regulators determined that Signature Bank of New York poses a systemic danger and decided to take it over. According to Biden, investors would not be safeguarded and bank management would be sacked.
As the markets were about to begin on Monday, the Dow futures dropped more than 300 points.
The fall of Silicon Valley Bank, the second-largest since the financial crisis of 2008, occurred as a result of a run on the bank by failing tech companies, who quickly withdrew cash and put the bank in a situation where it had to sell bonds at a loss to satisfy the withdrawals.
On Sunday, Treasury Secretary Janet Yellen emphasized that improved controls, like as capital and liquidity oversight, have been put in place as a result of the collapse of the banking system. “resilience” she added, adding that the system shown its “so Americans can have confidence in the safety and soundness of our banking system.” during the coronavirus outbreak.
