US President Joe Biden delivered a speech reassuring Americans that the banking system is safe, following the collapse of Silicon Valley Bank and Signature Bank. He assured customers that they will have access to their money, and no losses will be suffered by taxpayers. Instead, money will come from the fees that banks pay into the deposit insurance fund, while the banks’ management will be fired. Investors in the banks will not be protected since they knowingly took a risk.
Biden stressed the importance of holding those responsible accountable by logging a full account of what happened. He insisted that in his administration, no one is above the law. He also cited the requirements put in place during the Obama administration, including the Dodd-Frank Act, saying that there were rules to prevent a repeat of the 2008 financial crisis, but added that the Trump administration rolled some of these regulations back.
Biden said he would ask Congress and the banking regulators to strengthen the rules for banks and make it less likely for a bank failure to happen again, protecting American jobs and small businesses. While Biden reassured the public that the banking system is safe and that immediate action had been taken, he made it clear that his administration will not stop there.
The collapse of Silicon Valley Bank and Signature Bank highlights the importance of regulations and risk-management in the banking system. The failure of the banks could have had catastrophic consequences on American small businesses and the economy. Biden’s speech reassured the public that measures are in place to protect customers and that further steps will be taken to strengthen regulations and prevent such failures from happening again.