President Joe Biden on Monday underscored that the American banking system remains “safe,” laying out how his administration is taking action to contain Silicon Valley Bank’s collapse.
“Americans can rest assured that our banking system is safe. Your deposits are safe,” Biden said in remarks Monday morning from the Roosevelt Room. “Let me also assure you we will not stop at this. We will do whatever is needed on top of all this.”
Biden directly explained to the public what exactly he has instructed his administration to do to protect small businesses and workers, including backstopping depositors’ funds, taxpayers not being on the hook for these moves, holding those responsible accountable and not extending relief to investors of Silicon Valley Bank.
The chaos instigated by high interest rates led to the old-fashioned bank run on Thursday, in which depositors yanked $42 billion from Silicon Valley Bank.
SVB provided financing for almost half of US venture-backed technology and health care companies. At the end of 2022, the bank said it had $151.5 billion in uninsured deposits, $137.6 billion of which was held by US depositors.
While relatively unknown outside Silicon Valley, the bank was among the top 20 American commercial banks, with $209 billion in total assets at the end of last year, according to the FDIC. It’s the largest lender to fail since Washington Mutual collapsed in 2008.
Despite initial panic on Wall Street over the run on Silicon Valley Bank, which caused its shares to crater, analysts said the bank’s collapse was unlikely to set off the kind of domino effect that gripped the banking industry during the 2008 financial crisis.
Top administration officials entered the weekend alarmed by the failure of SVB and on high alert for additional risk. They maintained, however, a clear belief in the broader…
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