On Sunday, US President Joe Biden vowed to hold “fully accountable” those responsible of Silicon Valley Bank and another financial institution, Signature Bank, for their failure. He also made an effort to reassure People that their deposits are secure.
“I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again,” Biden said in a statement.
“The American people and American businesses can have confidence that their bank deposits will be there when they need them,” the president added.
After the failures of Silicon Valley Bank and Signature Bank, Biden said he intended to give a speech on Monday morning to reassure Citizens about the US banking sector.
“I will deliver remarks on how we will maintain a resilient banking system to protect our historic economic recovery,” he said Sunday night in a statement that also included Biden’s promise of “holding those responsible for this mess fully accountable.”
Financial agencies, including the US Treasury, declared in a joint statement
Financial agencies, including the US Treasury, declared in a joint statement that SVB depositors will have access to “all of their money” beginning on March 13th.
According to US Federal Reserve officials, the “core goal” of the actions was to reassure bank customers that they would have enough money “to fulfil payroll, to keep their businesses operating, and to ensure households are able to pay the rent or the mortgage, or any other payments,” on Sunday evening.
The Fed declared it will provide banks with additional funding to help them satisfy the needs of depositors, including withdrawals.
“We are taking decisive actions to protect the US economy by strengthening public confidence in our banking system,” the agencies said.
Why US regulators shut Signature Bank?
As of December 31, Signature Bank, a commercial bank with New York state charter and FDIC insured, had total assets of about $110.36 billion and total deposits of about $88.59 billion, according to a separate statement from the New York Department of Financial Services.
An request for comment was not answered immediately by Signature Bank representatives.
After laying out a plan to raise capital, Silicon Valley Bank abruptly crashed on Friday, becoming the largest US lender to fail in more than a decade.
Due to the bank’s huge loss on the sale of its assets during a period of rising interest rates, investors and depositors quickly started withdrawing their funds. Investors and depositors attempted to withdraw $42 billion alone on Thursday.
To solve the problems with the defunct Silicon Valley Bank and prevent a possible contagion from affecting other lenders, US regulators are working against the clock.
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