President Joe Biden sought to reassure the country Monday that the "banking system is safe" and that taxpayers would not bear any losses following the failures of Silicon Valley Bank and Signature Bank last week.
On Sunday, the Biden administration guaranteed Silicon Valley Bank deposits, including uninsured amounts, so customers will have access to their money as soon as Monday after the tech-focused institution collapsed last week. The intervention, along with the decision to unwind Signature Bank, is aimed at avoiding additional bank runs and helping business clients remain operational.
SILICON VALLEY BANK COLLAPSE: BIDEN VOWS TO 'STRENGTHEN OVERSIGHT AND REGULATION'
"All customers who had deposits at these banks can rest assured, rest assured they'll be protected and they'll have access to their money as of today. That includes small businesses across the country that bank there and need to make payroll, pay their bills and stay open for business," Biden declared Monday morning. "This is an important point, no losses will be borne by the taxpayers. I'm going to repeat that. No losses will be borne by the taxpayers. Instead, the money will come from the fees that banks pay into the Deposit Insurance Fund. Because of the actions of that, because of the actions that our regulators have already taken, every American should feel confident that their deposits will be there, if and when they need them."
"The bottom line is this. Americans can rest assured that our banking system is safe. Your deposits are safe," the president added. "Let me also assure you, we will not stop at this. We'll do whatever is needed."
The president did not answer questions about whether or not he expects there to be a "ripple effect" or for other banks to fail in the wake of SBV's failure.
Biden previously promised to punish those responsible for the collapse of Silicon Valley Bank as his administration seeks to make the financial institution's customers whole.
"Over the weekend, and at my direction, the Treasury Secretary and my National Economic Council Director worked diligently with the banking regulators to address problems at Silicon Valley Bank and Signature Bank," the statement read. "I am pleased that they reached a prompt solution that protects American workers and small businesses, and keeps our financial system safe."
"I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again."
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Regulators will not protect shareholders and unsecured creditors, and there will be no bailouts, according to Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell, and Federal Deposit Insurance Corporation Chairman Martin Gruenberg on Sunday evening.