U.S. President Joe Biden assured American citizens that the banking system is safe following the collapses of Signature Bank and Silicon Valley Bank.
“Americans can have confidence that the banking system is safe,” Biden said. “All customers who had deposits with these banks can rest assured that they’ll be protected and will have access to their money as of today.”
Biden’s address, and the maneuvering announced by regulators over the weekend, is an attempt to halt further bank runs. U.S. financial authorities assured full return of Silicon Valley and Signature Bank customer deposits on Sunday.
Biden repeated a statement released over the weekend that “no losses will be borne on the taxpayer.” Deposits will be available for employers and small businesses affected, while investors and bondholders will not receive a similar government backstop.
“The actions that we took today were designed to limit the consequences of the depositor outflows from Silicon Valley and from Signature and to reduce any spillover effects,” the Federal Reserve Board, the Treasury Department and the Federal Deposit Insurance Corporation said in a joint statement.
Silicon Valley Bank was closed down by a California regulator after it failed to meet a surge in outflows on Friday. On Sunday, a New York regulator seized Signature Bank “to protect depositors.”
Both financial institutions intersect with crypto, as Signature Bank works with stablecoin companies and Silicon Valley Bank works with tech startups and venture capital firms.
© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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