Biden to defend U.S. banking system after SVB and Signature collapse

Biden to defend U.S. banking system after SVB and Signature collapse

President Joe Biden will tackle the banking crisis on Monday that prompted U.S. regulators to intervene with a series of emergency measures following the failures of Silicon Valley Bank and Signature Bank that threatened to trigger a broader crisis.

Biden on Sunday hinted at new regulation of big banks following the biggest U.S. bank failure since the 2008 financial crisis, but faces a divided Congress that is unlikely to pass tougher new rules.

His economic team worked with regulators over the weekend on the measures, which include guaranteeing deposits at both banks, establishing a new mechanism to give financial institutions access to emergency funds and making it easier for banks to borrow from the Federal Reserve in emergencies.

The measures sent waves of relief to Silicon Valley and sent stock futures rallying, but the crisis is testing confidence in the U.S. financial system and fears persist that the fallout will roil global markets this week.

“The American people and American businesses can trust that their bank deposits will be there when they need them,” Biden said in his statement Sunday.

Biden will speak Monday morning about additional plans to keep the economy going amid a crisis triggered by the sudden collapse of Silicon Valley Bank (SVB) last week, he added.

“I am strongly committed to holding those responsible for this disaster accountable and to continuing our efforts to strengthen the supervision and regulation of the big banks so that we do not find ourselves in this situation again,” Biden said. His comments are expected after 08.00 local time (1200 GMT).

Read Also   China's gasoline exports in August nearly double from a year earlier

The US markets open at 9.30 am (13.30 GMT).

The U.S. Federal Deposit Insurance Corporation said Monday it had transferred all Silicon Valley Bank deposits to a newly created bridge bank and that all depositors would have access to their money starting Monday morning.

Leave a Comment