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Tuesday, March 28, 2023

Joe Biden expounded upon the dependability of the American banking system in the wake of the failure of two financial institutions.

US President Joe Biden has called the US banking system safe and promised to tighten banking regulations after the collapse of two banks – California’s Silicon Valley Bank and New York’s Signature Bank. About this he declared addressing citizens.

“Americans can be sure that the banking system is sound. Your contributions will be there when you need them,” Biden said.

He assured that taxpayers would suffer no loss. Funds to settle the banking crisis will come from the Deposit Insurance Fund, the president said.

According to Biden, executives of failing banks will be fired and held accountable. He also refused to protect bank investors, noting that they were “consciously taking risks”. “When the risk didn’t pay off, investors lost their money. That’s how capitalism works,” the president said.

Biden also announced new banking regulatory measures to prevent the situation from happening again in the future. In particular, he intends to ask Congress to restore the banking rules that were canceled under the presidency of Donald Trump. “In my administration, no one is above the law,” added the president.

California-based Silicon Valley Bank (SVB), which has worked with Silicon Valley startups, filed for bankruptcy on March 10. This is the largest bank failure in the United States since the 2008 financial crisis. Additionally, Silvergate, one of the largest cryptocurrency banks in the United States, has announced a voluntary liquidation. On March 13, the US Treasury announced the closure of New York-based Signature Bank due to systemic risks.

HSE Professor Ivan Rodionov, in a conversation with RTVI, called the financial injections during the pandemic and the attraction of a record amount of venture capital by US companies in 2020-2021 the reason for the rise and fall. the fall of SVB.

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