by Trevor Hunnicutt
WASHINGTON (Reuters) – President Joe Biden said on Monday that emergency measures taken by regulators to preserve bank deposits after the failures of Silicon Valley Bank and Signature Bank should convince Americans that the banking system is safe.
“Americans can trust that the banking system is safe. Your deposits will be there when you need them,” Joe Biden said.
The President of the United States promised sanctions against the leaders of the two bankrupt banks and specified that the investors who contributed to it would leave feathers there.
“They took a risk knowingly, and when the risk does not pay off, those who took it lose money. That’s how capitalism works,” said Joe Biden, assuring American taxpayers wouldn’t have a penny to pay.
Stressing that such an event “must not happen again”, Joe Biden indicated that he would ask regulators and Congress to impose stricter rules on the big banks, even if he is not sure to have for this by a parliamentary majority.
“I will ask Congress and banking regulators to strengthen rules for banks to reduce the risk of this type of bank failure happening again and to protect American jobs,” he said.
Joe Biden had made similar remarks on Sunday in a press release aimed at avoiding a new wind of panic at the counters and in the financial markets.
The independent agency Federal Deposit Insurance Corporation (FICB) said on Monday it had transferred all deposits from Silicon Valley Bank to a newly created bridge bank and that all depositors would have access to their money starting Monday morning.
During the financial crisis of 2008, the United States had reinforced its regulations on banks with the framework law of the “Dodd-Frank Act” but this was partially revised under the presidency of Donald Trump.
The amendments to the Dodd-Frank Act notably increased the threshold at which banks are considered to present a systemic risk and are subject to stricter supervision from $50 billion to $250 billion.
Silicon Valley Bank had $209 billion in assets at the end of last year.
(Report by Trevor Hunnicutt, with contributions from Simon Lewis and Susan Heavey; Blandine Hénault and Tangi Salaün for the )
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