Biden Emphasizes US Banking System Is Safe; Silicon Valley Bank Management Replaced

WASHINGTON – President Biden sought to assure the nation Monday (March 13) that “the banking system is safe” following the collapse of Silicon Valley Bank last week. Speaking from the White House, the Washington Post is reporting that Biden said, “your deposits will be there when you need them.” Officials had announced that depositors with money at the failed California bank would be paid back in full and able to access their money Monday morning. Biden also said he is asking Congress and regulators to take steps to make similar episodes less likely.

Biden Says Bank Management Will Be Replaced

During his remarks from the White House on Monday, President Biden said that managers would be replaced at Silicon Valley Bank and any others taken over by the Federal Deposit Insurance Corporation.

“The people running the bank should not work there anymore,” Biden said.

He also noted that while customers would still have access to their money, bank investors would not be protected. “They knowingly took a risk,” Biden said. “And when the risk didn’t pay off, investors lose their money. That’s how capitalism works.”

Biden departed without taking questions from reporters.

Here are some significant developments:

• Biden’s remarks followed an announcement by his administration Sunday that all depositors at the failed Silicon Valley Bank would have access to all their money on Monday morning. The move was an extraordinary intervention aimed at averting a crisis in the financial system.
• Authorities said they were also extending protection to depositors of a second bank, Signature Bank of New York, which state regulators closed on Sunday as the unease in the financial sector spread.
• The Federal Reserve announced that it was creating a lending facility for the nation’s banks, designed to buttress them against financial risks caused by Friday’s collapse of SVB.
• The Biden administration briefed members of Congress about the SVB’s collapse over the weekend and plans another briefing Monday morning.