President Joe Biden is directly weighing in on the Silicon Valley Bank collapse in an attempt to reassure Americans the federal government has things under control and that the banking system is safe.
"Over the weekend, and at my direction, the Treasury Secretary and my National Economic Council Director worked diligently with the banking regulators to address problems at Silicon Valley Bank and Signature Bank. I am pleased that they reached a prompt solution that protects American workers and small businesses, and keeps our financial system safe. The solution also ensures that taxpayer dollars are not put at risk," Biden said. "The American people and American businesses can have confidence that their bank deposits will be there when they need them."
"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," he continued.
Biden will make remarks Monday morning about how his administration plans to "maintain a resilient banking system."
According to Treasury Secretary Janet Yellen, there will be no taxpayer bailout for SVB despite loud demands for the government to step in.
"We’re not going to do that again...but we are concerned about depositors, and we’re focused on trying to meet their needs," Yellen said during an interview with Face the Nation.
In a joint statement between Yellen, Federal Reserve Chair Jerome Powell and FDIC Chairman Martin Gruenberg released Sunday, it was reiterated than no burden with be placed on the taxpayer. They also announced the closing of another bank, Signature Bank, New York, to mitigate risk. Here is the statement in full:
Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.
After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.
We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.
Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.
The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today's actions demonstrate our commitment to take the necessary steps to ensure that depositors' savings remain safe.
Silicon Valley Bank UK has today been sold to @HSBC.
— HM Treasury (@hmtreasury) March 13, 2023
This transaction has been facilitated by the @bankofengland in consultation with HM Treasury.
No taxpayer money is involved and customer deposits have been protected.
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