US President Joe Biden said on Monday that Washington authorities have taken all necessary measures to ensure the solvency of Silicon Valley Bank’s customer deposits after the collapse of the US bank caused major shocks in the markets, Reuters reports.
Biden addressed Americans in a speech at the White House on Monday after the sudden collapse of the credit institution last Friday led to the biggest failure of the US banking system since the 2008 financial crisis.
Little-known to the general public, SVB specialized in financing startups and became the 16th largest US bank by assets, with assets of $209 billion at the end of 2022 and approximately $175.4 billion in warehouses.
The bank has been unable to cope with massive withdrawals from its customers, mostly technology companies, and its latest attempts to raise new money have failed.
Therefore, the US authorities officially took over the bank and entrusted its management to the US Deposit Insurance Agency (FDIC).
Joe Biden recalled this in his opening speech on Monday, stressing that “Americans can be confident that the banking system is safe.”
The President of the United States says that ordinary Americans will not pay for the bankruptcy of the bank
“Your deposits will be there when you need them. Small businesses across the country that have deposits in these banks can breathe easier, knowing that they will be able to pay their workers and their bills,” the head of the White House assured.
Joe Biden also said that the losses recorded after the collapse of the bank will not be borne by American taxpayers, they will all be covered by insurance funds.
“I will ask Congress and banking regulators to strengthen the rules for banks to make this type of bank failure less likely in the future,” the US president said.
The collapse of Silicon Valley Bank is not only the largest bank failure since Washington Mutual in 2008, but also the second largest failure of a US retail bank.
The US central bank (Federal Reserve System-FED) announced that a closed meeting of the board of governors will be held on Monday under emergency procedures.
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Source: Hot News
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.