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Biden said the administration needs to reduce the risks of a future recurrence and protect American jobs and small businesses.
The President of the United States Joe Biden has weighed in on the sudden and recent collapse of Silicon Valley Bank (SVB) and Signature Bank (NASDAQ: SBNY). Many SVB clients pulled out their funds from the bank last week, causing the company to decline massively before its eventual demise. The unfortunate exit sparked panic among investors who had also invested in Signature Bank and First Republic Bank (NYSE: FRC).
Amid fears and uncertainties among investors, Signature Bank’s shares began to decline. Despite the decreasing stock prices, analysts suggested that Signature Bank would survive the storm as it offered services to a variety of customers. In addition, the analysts referred to the financial institutions’ solid fundamentals. Eventually, the New York Department of Financial Services (NYDFS) took over the commercial banking company. The Financial agency stepped in to protect the depositor’s funds and maintain citizens’ confidence in the economy. At the same time, the Federal Deposit Insurance Corporation took over SVB.
Biden Seeks to Prevent Future Recurrence Following Unfortunate Events with SVB and Signature Bank
Following the failure of SVB and Signature Bank, Biden has called on tightened rules for US financial institutions. The POTUS said he would call on bank regulators and Congress to begin work on regulating the bank sector. Delivering remarks on the economy from the White House, the president started by assuring Americans that the banking system is safe and their deposits are secure and available if and when needed.
Biden also mentioned that customers and small businesses with deposits in SVB and Signature Bank would have access to their money. He emphasized that the banks’ customers can continue running their businesses. However, the US presidents noted no protection for investors with funds in either of the collapsed banks.
As a result of the unfortunate collapse of SVB and Signature Bank, Biden is asking Congress and banking regulators to strengthen rules for banks. He said the administration needs to reduce the risks of a future recurrence and protect American jobs and small businesses. Biden said there were tough requirements for banks, like SVB and Signature Bank, during the Obama-Biden government. At the time, the Dodd-Frank law was also in place to ensure that the 2008 crisis never happened again. Unfortunately, some of these requirements were rolled back while Donald Trump was in power.
“The bottom line is this, Americans can rest assured that our banking system is safe, Your deposits are safe. Let me also assure you, we will not stop at this. We’ll do whatever is needed.”
According to Biden, the current administration is focused on swift actions to protect depositors, the banking system, and economic gains.