President Joe Biden seemingly took the stage Monday morning for the sole purpose of congratulating himself as a number of banks collapsed in what seemed to be a chain reaction over the past week, making the claim that it was “quick action” from the people in his administration that ended up stabilizing the entire banking industry.
“Your deposits will be there when you need them. Small businesses across the country that deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills,” stated Biden. “And their hardworking employees can breathe easier as well.”
Biden went on to state that he was entirely focused on lowering the risk that the chain reaction of collapsing banks comes to and end. “During the Obama-Biden administration, we put in place tough requirements on banks like Silicon Valley Bank and Signature Bank, including the Dodd-Frank law to make sure the crisis we saw in 2008 would not happen again,” he stated. “Unfortunately, the last administration rolled back some of these requirements.”
These statements from Biden were issued in the wake of an announcement from Silicon Valley Bank announcing a $1.75 billion share sale last week after the financial institution suffered heavy losses from the liquidation of a $21 billion bond portfolio, sparking extreme concern among various venture capital firms and startups that have ties to the company in regard to the safety of their assets. SVB, which is known as the 16th-largest bank in the United States and the largest bank of its kind in California’s Silicon Valley, has been known to lend funds to close to half of the venture-backed technology and healthcare companies.
In a statement released this past Friday, the Federal Deposit Insurance Corporation (FDIC) explained that SVB was shut down by the California Department of Financial Protection and Innovation.
As a group, Treasury Secretary Janet Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg came together to announce that a second bank was also closing down in New York.
“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority,” expressed the group. “All depositors of this institution will be made whole. Â As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.”
