President Joe Biden patted himself on the back Monday morning as multiple banks have collapsed in recent days, claiming that the “quick action” of his administration has stabilized the banking industry.
“Your deposits will be there when you need them. Small businesses across the country that deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills,” Biden said. “And their hardworking employees can breathe easier as well.”
Biden said he was focused on reducing the risk of other financial institutions collapsing. “During the Obama-Biden administration, we put in place tough requirements on banks like Silicon Valley Bank and Signature Bank, including the Dodd-Frank law to make sure the crisis we saw in 2008 would not happen again,” he said. “Unfortunately, the last administration rolled back some of these requirements.”
Biden’s remarks come after the Silicon Valley Bank announced a $1.75 billion share sale on Wednesday after the financial institution suffered heavy losses from the liquidation of a $21 billion bond portfolio, raising concerns among venture capital firms and startups with ties to the company about the safety of their assets. SVB, the 16th-largest bank in the United States and the largest in California’s Silicon Valley, lends to nearly half of publicly traded venture-backed technology and healthcare companies.
The Federal Deposit Insurance Corporation (FDIC) said on Friday that SVB was closed by the California Department of Financial Protection and Innovation.
Treasury Secretary Janet Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg announced in a statement on Sunday that a second bank was closed in New York on Sunday by state officials.
“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,” the statement said. “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.”
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