Talking on the White Home on Monday morning, President Biden addressed what his administration has executed after two banks — Silicon Valley Financial institution and Signature Financial institution — had been closed by financial institution regulators. Biden mentioned, “Individuals can relaxation assured that our banking system is secure. Your deposits are secure.”
Video Transcript
JOE BIDEN: At present, due to the fast motion of my administration over the previous few days, Individuals can have faith that the banking system is secure. Your deposits will likely be there once you want them. Small companies throughout the nation that deposit accounts at these banks can breathe simpler, realizing they will be capable to pay their employees and pay their payments. And their hardworking workers can breathe simpler as nicely.
Final week, after we realized of the issues of the banks and the influence they may have on jobs, of small companies, and banking system general, I instructed my staff to behave shortly to guard these pursuits. They’ve executed that. They’ve executed that.
On Friday, the federal government regulator in cost, the FDIC, took management of Silicon Valley Financial institution’s property. And over the weekend, it took management of Signature Financial institution’s property. Treasury Secretary Yellen and a staff of banking regulators have taken motion, rapid motion. And listed here are the highlights.
First, all clients who had deposits in these banks can relaxation assured. I need to have– relaxation assured they will be protected, they usually’ll have entry to their cash as of at this time. That features small companies throughout the nation that financial institution there and have to make payroll, pay their payments, and keep open for enterprise.
No losses will be– and this is a crucial level. No losses will likely be borne by the taxpayers. Let me repeat that. No losses will likely be borne by the taxpayers. As a substitute, the cash will come from the charges that banks pay into the deposit insurance coverage fund. Due to the actions of that– due to the actions that our regulators have already taken, each American ought to really feel assured that their deposits will likely be there if and once they want them.
Second, the administration of those banks will likely be fired. If the financial institution is taken over by FDIC, the individuals working the financial institution mustn’t work there anymore. Third, traders within the banks is not going to be protected. They knowingly took a danger. And when the chance did not repay, traders lose their cash. That is how capitalism works.
And fourth, there are necessary questions of how these banks acquired into the circumstance within the first place. We should get the complete accounting of what occurred and why these accountable will be held accountable. In my administration, no one– in my– nobody is above the legislation. And eventually, we should scale back the chance of this occurring once more.
Through the Obama-Biden administration, we put in place powerful necessities on banks like Silicon Valley Financial institution and Signature Financial institution, together with the Dodd-Frank legislation to make it possible for the disaster we noticed in 2008 wouldn’t occur once more. Sadly, the final administration rolled again a few of these necessities.
I will ask Congress and the banking regulators to strengthen the principles for banks to make it much less probably this type of financial institution failure would occur once more and to guard American jobs and small companies. Look, the underside line is that this. Individuals can relaxation assured that our banking system is secure. Your deposits are secure.