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US banking safe, taxpayers won't be burden: Joe Biden after Silicon Valley Bank collapse

Americans can 'have confidence' US banking is safe after failures and fears of global ripple effects, US President Joe Biden said.

Shashwat Bhandari Edited By: Shashwat Bhandari @ShashBhandari New Delhi Updated on: March 13, 2023 22:15 IST
US President Joe Biden
Image Source : AP US President Joe Biden

US President Joe Biden on Monday said that none of the losses from bank failures will burden taxpayers adding Americans can have confidence that US banking is safe.

"None of the losses from bank failures will burden taxpayers, funds will come from bank fees," AP reported Joe Biden as saying.

"Americans can 'have confidence' US banking is safe after failures and fears of global ripple effects," he said.

The US President has called on Congress and regulators to strengthen rules' on banks after failures, reports said.

"Americans can rest assured that our banking system is safe. Your deposits are safe,” Biden said from the Roosevelt Room of the White House.

Taxpayers will not bear any losses from the move, which will be funded by fees regulators charge to banks, he said. The banks' leaders will be fired, he added.

Biden in his address allayed fears, directly explaining what he has instructed his administration to do to protect small businesses and workers in the wake of regulator shutdowns of both Silicon Valley Bank and Signature Bank over the last few days.

The California-based Silicon Valley Bank (SVB), the 16th largest bank in the United States, was closed on Friday by the California Department of Financial Protection and Innovation which later appointed the Federal Deposit Insurance Corporation (FDIC) as its receiver.

It was the largest failure of a US bank since the financial crisis in 2008.

It came after SVB was scrambling to raise money to plug a loss from the sale of assets affected by higher interest rates. Word of the troubles led customers to race to withdraw funds leading to a cash crisis.

Authorities on Sunday also said they had taken over Signature Bank of New York, which was seen as the institution most vulnerable to a similar bank run after SVB.

"Every American should feel confident that their deposits will be there if and when they need them," President Biden said.

"Let me also assure you. we will not stop at this. We'll do whatever is needed," he added.

Amid this, trading has been temporarily halted in "dozens" of regional American banks after shares slump following the collapse of Silicon Valley Bank, US Media reported.

(With inputs from PTI)

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