President Joe Biden has assured the American people that the banking system is safe and sound after the collapse of two large banks that cater to the tech industry, Silicon Valley Bank (SVB) and Signature Bank, in a historic bank run that shook the financial markets.
In a televised address from the White House, Biden said that his administration will do “whatever is needed” to shore up the banks and protect the deposits of millions of customers. He announced that the Federal Deposit Insurance Corporation (FDIC) will guarantee all deposits up to $250,000 per account, regardless of whether the banks are FDIC-insured or not.
“This is an unprecedented step, but it is necessary to restore confidence and stability in our banking system,” Biden said. “The money you have in your bank accounts is safe. The government stands behind it.”
Some analysts and investors said that Biden’s speech was another blow to the banking system, as it signaled more regulation and scrutiny for the banks, especially those that cater to the tech industry. They argued that Biden’s speech did not address the root causes of the collapse of Silicon Valley Bank (SVB) and Signature Bank, two of the largest banks in the country, which were fraud and mismanagement.
They also said that Biden’s speech did not reassure them about the stability and liquidity of the banking sector, which was shaken by a historic bank run that triggered the bank failures.
Others said that Biden’s speech was a necessary and positive step to restore confidence and stability in the banking system, as it showed that the government was taking swift and decisive actions to protect the deposits of millions of customers and prevent contagion.
They praised Biden’s announcement that the Federal Deposit Insurance Corporation (FDIC) will guarantee all deposits up to $250,000 per account, regardless of whether the banks are FDIC-insured or not. They also welcomed Biden’s instruction to Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell to work closely with the regulators and supervisors of the banking sector to ensure adequate liquidity and oversight.
The political fallout from the bank failures was also evident, as some Republican presidential contenders criticized Biden and his administration for their handling of the crisis.