According to US President Joe Biden, we should not expect an “explosion” of the country’s banking sector, even if he understands his fears in this regard.
Biden made the corresponding statement during a press conference with Canadian Prime Minister Justin Trudeau.
According to Biden, we must wait for the situation to calm down, and he sees no reason for an “explosion”. At the same time, the US President believes that middle market banks should be able to survive this situation, and from his perspective, they will be able to.
After the Silicon Valley Bank and Signature Bank bankruptcies, Biden said the country’s banking system was safe and that bankrupt bank management would be fired and held accountable.
The Wall Street Journal previously reported that 186 U.S. banks could follow SVB’s path. Experts interviewed by the publication note that Silicon Valley Bank sank after falling asset values amid rising interest rates on loans. After that, anxious customers whose deposits were uninsured started withdrawing deposits, which led to the collapse. Experts say that if uninsured depositors at the other 186 U.S. banks start withdrawing their money, then insured depositors could face a writedown simply because the banks won’t have the funds they need.
Earlier, Britain’s Financial Times newspaper published an article stating that since early March, investors have withdrawn $165 billion from the six largest US banks amid the failure of Silicon Valley Bank (SVB) and Signature Bank. . Funds were withdrawn from banks such as Citigroup, Morgan Staney, Bank of America, Goldman Sachs, JPMorgan Chase and Wells Fargo. As a result, they lost 13% of market value.
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