President Joe Biden said Monday that people should “rest assured” after his administration acted to ease uncertainties about the banking system in the wake of the collapse of Silicon Valley Bank last week, the second-largest bank failure in U.S. history.
The president spoke about the actions taken by his administration to give the country confidence that the banking system is safe.
“Thanks to the quick action of my administration over the past few days, Americans can have confidence that the banking system is safe,” Biden said. “Your deposits will be there when you need them.”
Biden explained that he instructed his team to protect U.S. workers and small businesses and detailed their actions to protect customers’ deposits and not put taxpayer dollars at risk, to hold those responsible accountable, and not to protect investors in the bank.
The president said the management of Silicon Valley Bank and Signature Bank, a second institution that was included in the plan, would be fired. “If the bank is taken over by FDIC, the people running the bank should not work there anymore,” he said.
Biden called for a “full accounting” of what led to the shutdown of Silicon Valley Bank and “why those responsible can be held accountable.”
“In my administration, no one is above the law. And finally, I must reduce the risk of this happening again,” he said.
The president said he will ask Congress and the banking regulators to strengthen rules for banks to make it “less likely this kind of bank failure would happen again.”
“Americans can rest assured that our banking system is safe. Your deposits are safe. Let me also assure you we will not stop at this — we’ll do whatever is needed,” he said.
Biden’s remarks come after federal regulators Sunday evening moved to protect all deposits at Silicon Valley Bank hours before global stock markets resumed trading.
In a statement Sunday evening, the president said that under his direction, Treasury Secretary Janet Yellen and National Economic Director Lael Brainard “worked diligently” with the banking regulators to address problems at Silicon Valley Bank, as well as Signature Bank, which federal authorities also took control of and had become a hub for cryptocurrency financing.
The U.S. Treasury, the Federal Reserve and the Federal Deposit Insurance Corp. said the government would back Silicon Valley Bank deposits beyond the federally insured ceiling of $250,000, addressing concerns about uninsured funds held at the country’s 16th largest bank, which had $209 billion in assets and more than $175 billion in deposits.
“Depositors will have access to all of their money starting Monday, March 13,” the agencies said in a joint statement Sunday evening. “No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
Yellen on Sunday convened a meeting of the Financial Stability Oversight Council in an executive session by videoconference. During the meeting, the council heard updates from the Federal Deposit Insurance Corp., the Federal Reserve Board and the Treasury Department on actions they were taking to stabilize the financial system and protect depositors.
The Biden administration also held a briefing for senators on the situation Sunday night. Some Senate Republicans on the Banking Committee claimed they didn’t get invited to the all-member briefing, with a spokesperson for ranking member Tim Scott, R-S.C., telling NBC News that Treasury Department officials admitted on the call that they had failed to notify all offices.
“It is unacceptable that Senate Republicans were excluded from Treasury’s briefing to Congress this evening. The lack of transparency & responsiveness from the Biden administration has been galling,” the committee GOP tweeted. “The administration has the responsibility to keep ALL members updated in real time.”
A Treasury Department official pushed back on the claim, calling it untrue and saying that invitations were sent to the Republican leadership in the House and the Senate, noting many Republican members joined the briefing. The official says more briefings are expected in the coming days.
On Sunday, California lawmakers were told on a briefing call that the Treasury Department and the Federal Deposit Insurance Corp.’s top priority is to engineer a sale after the shutdown of Silicon Valley Bank, two people on the call said.
Additionally, a group of Democratic lawmakers urged federal officials to act swiftly to protect depositors in a letter Sunday to Yellen, Federal Reserve Chair Jerome Powell, FDIC Chair Martin Gruenberg and the acting comptroller of the currency, Michael Hsu.
Brian Cheung, Rob Wile, Elyse Perlmutter-Gumbiner and Julie Tsirkin contributed.