Biden insists US banks are sound after two major collapses

A sign of a branch of the Silicon Valley Bank is pictured at an office building where the bank is located in Frankfurt, Germany, March 13, 2023. (AP Photo/Michael Probst)
A sign of a branch of the Silicon Valley Bank is pictured at an office building where the bank is located in Frankfurt, Germany, March 13, 2023. (AP Photo/Michael Probst)

US President Joe Biden tells US residents the nation’s financial systems are sound, following the swift and stunning collapse of two banks that prompted fears of a broader upheaval.

“Americans can have confidence that the banking system is safe,” he says from the Roosevelt Room before a trip to the West Coast. “Your deposits will be there when you need them.”

US regulators closed the 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 failure of Washington Mutual.

In a sign of how fast the financial bleeding was occurring, regulators announced that New York-based Signature Bank had also failed.

The president, speaking from the Roosevelt Room shortly before US markets opened, says he’d seek to hold those responsible and pressed for better oversight and regulation of larger banks. And he promised no losses would be borne by taxpayers.

Governments in the US and Britain were both taking extraordinary steps to prevent a potential banking crisis.

US regulators worked through the weekend to find a buyer for Silicon Valley Bank, which had more than $200 billion in assets and catered to tech startups, venture capital firms, and well-paid technology workers.

While those efforts appeared to have failed, officials assured all of the bank’s customers that they would be able to access their money on Monday.

The Bank of England and UK Treasury say that they had facilitated the sale of the Silicon Valley bank’s London-based subsidiary to HSBC, Europe’s biggest bank, ensuring the security of 6.7 billion pounds ($8.1 billion) of deposits.

The assurances came as part of an expansive emergency lending program intended to prevent a wave of bank runs that would threaten the stability of the banking system and the economy as a whole.

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