President Joe Biden told Americans on Monday that the nation’s financial systems are sound, following the shocking and rapid collapse of two banks that raised fears of broader turmoil.
“Americans can trust that the banking system is safe,” he said from the Roosevelt Room before a trip to the West Coast. “Your deposits will be there when you need them.”
US regulators shut down Silicon Valley Bank on Friday after it experienced a traditional bank run, where depositors rushed to withdraw their funds all at once. It is the second largest bank failure in US history, behind only the 2008 Washington Mutual bankruptcy.
In a sign of how fast the financial hemorrhaging was occurring, regulators announced that New York-based Signature Bank had also failed.
The president, speaking from the Roosevelt Room of the White House shortly before the US markets opened, said he would try to hold the culprits accountable and pushed for better supervision and regulation of the biggest banks. And he promised that taxpayers would bear no loss.
The US and British governments are taking extraordinary measures to prevent a potential banking crisis after the failure of California-based Silicon Valley Bank raised fears of broader turmoil.
US regulators worked over the weekend to find a buyer for the bank, which had more than $200 billion in assets and served tech startups, venture capital firms and well-paid tech workers.
While those efforts appeared to have failed, officials assured all bank customers that they would be able to access their money on Monday.
The guarantees came as part of a broad emergency lending program aimed at averting a wave of bank runs that would threaten the stability of the banking system and the economy as a whole.
Meanwhile, the Bank of England and the UK Treasury said early Monday they had facilitated the sale of the London-based bank’s subsidiary to HSBC, Europe’s biggest bank, securing the safety of £6.7bn ( 8,100 million dollars) in deposits.
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