NEW YORK, 13 Mar: President Joe Biden on Monday told Americans the nation\u2019s financial systems were safe, seeking to project calm following the swift and stunning collapse of two banks that prompted fears of a broader upheaval.
\n\u201cYour deposits will be there when you need them,\u201d he said.
\nU.S. regulators closed the Silicon Valley Bank on Friday after it experienced a traditional bank run, where depositors rushed to withdraw their funds all at once. It is the second largest bank failure in U.S. history, behind only the 2008 failure of Washington Mutual. But the financial bloodletting was swift; New York-based Signature Bank also failed.
\nThe president, speaking from the White House shortly before a trip to the West Coast, said he\u2019d seek to hold those responsible accountable, and pressed for better oversight and regulation of larger banks. And he promised no losses would be borne by taxpayers.
\n\u201cWe must get the full accounting of what happ-ened,\u201d he said. \u201cAmericans can have confidence that the banking system is safe.\u201d
\nBiden also said management of the banks should be fired. \u201cIf the bank is taken over by the FDIC, the people running the bank should not work there anymore,\u201d he said, referring to the Federal Deposit Insurance Corp., the agency responsible for ensuring the stability of the banking system.
\nAt more than $110 billion in assets, Signature Bank is the third-largest bank failure in U.S. history. Another beleaguered bank, First Republic Bank, announced Sunday that it had bolstered its financial health by gaining access to funding from the Fed and JPMorgan Chase.
\nThe developments left markets jittery as trading began Monday. The Asian and European markets fell and while U.S. markets traded higher, shares in midsized commercial banks were hammered despite assurances from Biden.
\nThe Bank of England and U.K. Treasury said early Monday that they had facilitated the sale of a Silicon Valley Bank subsidiary in London to HSBC, Europe\u2019s biggest bank, ensuring the security of 6.7 billion pounds ($8.1 billion) of deposits.
\nIn an effort to shore up confidence in the banking system, the Treasury Department, Federal Reserve and FDIC said Sunday that all Silicon Valley Bank clients would be protected and able to access their money.
\n\u201cThis 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,\u201d the agencies said in a joint statement.
\nUnder the plan, depositors at Silicon Valley Bank and Signature Bank, including those whose holdings exceed the $250,000 insurance limit, will be able to access their money on Monday.
\nBritain also moved quickly, working throughout the weekend to arrange the sale of Silicon Valley Bank UK Ltd., the California bank\u2019s British arm, for the nominal sum of one pound.
\nWhile the bank is small, with less than 0.2% of U.K. bank deposits according to central bank statistics, it had a large role in financing technology and biotech startups that the British government is counting on to fuel economic growth.
\nJeremy Hunt, Britain\u2019s Treasury chief, said some of the country\u2019s leading tech companies could have been \u201cwiped out.\u201d
\n\u201cWhen you have very young companies, very promising companies, they\u2019re also fragile,\u201d Hunt told reporters, explaining the why authorities moved so quickly. \u201cThey need to pay their staff and they were worried that as of 8 a.m. this morning, they might literally not be able to access their bank account.\u201d
\nHe stressed that there was never a \u201csystemic risk\u201d to Britain\u2019s banking system.
\nSilicon Valley Bank began its slide into insolvency when it was forced to dump some of its treasuries at at a loss to fund its customers\u2019 withdrawals. Under the Fed\u2019s new program, banks can post those securities as collateral and borrow from the emergency facility. (AP)<\/p>\n","protected":false},"excerpt":{"rendered":"
NEW YORK, 13 Mar: President Joe Biden on Monday told Americans the nation\u2019s financial systems were safe, seeking to project calm following the swift and stunning collapse of two banks that prompted fears of a broader upheaval. \u201cYour deposits will be there when you need them,\u201d he said. U.S. regulators closed the Silicon Valley Bank […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":{"0":"post-212725","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-world"},"_links":{"self":[{"href":"https:\/\/arunachaltimes.in\/index.php\/wp-json\/wp\/v2\/posts\/212725","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/arunachaltimes.in\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arunachaltimes.in\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/arunachaltimes.in\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/arunachaltimes.in\/index.php\/wp-json\/wp\/v2\/comments?post=212725"}],"version-history":[{"count":0,"href":"https:\/\/arunachaltimes.in\/index.php\/wp-json\/wp\/v2\/posts\/212725\/revisions"}],"wp:attachment":[{"href":"https:\/\/arunachaltimes.in\/index.php\/wp-json\/wp\/v2\/media?parent=212725"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arunachaltimes.in\/index.php\/wp-json\/wp\/v2\/categories?post=212725"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arunachaltimes.in\/index.php\/wp-json\/wp\/v2\/tags?post=212725"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}