HomeNewsBiden says US banking system 'safe,' but urges new regulations

    Biden says US banking system ‘safe,’ but urges new regulations

    US President Joe Biden speaks about the US banking system on March 13, 2023 in the Roosevelt Room of the White House in Washington, DC.

    President Joe Biden on Monday, March 13, reassured Americans that their banking system is secure in the wake of the collapse of SVB and said he wants tougher regulations to prevent future crises.

    “Americans can have confidence that the banking system is safe. Your deposits will be there when you need them,” Biden said in televised remarks from the White House after Silicon Valley Bank’s failure and the federal takeover of a second bank.

    Read more Article reserved for our subscribers Silicon Valley Bank’s closure is the largest bank failure since the 2008 crisis

    While the government is ensuring that SVB depositors get their money back, “no losses will be borne by the taxpayers,” Biden said. “The money will come from the fees that banks pay into the deposit insurance.”

    Biden challenged Congress to enact more stringent regulations, saying that “tough” safeguards brought in after the 2008 financial collapse had been undone under his Republican predecessor Donald Trump.

    Read more Article reserved for our subscribers Fed provides $25 billion in funding to avoid banking panic following SVB collapse

    “I’m going to ask Congress and the banking regulators to strengthen the rules for banks to make it less likely this kind of bank failure would happen again,” Biden said.

    He made clear he expects the consequences to fall on the shoulders of those responsible and that the government’s rapid response over the weekend was not a bank bailout, as happened in 2008. “We must get the full accounting of what happened and why, (so ) those responsible can be held accountable,” he said.

    Read more European stocks fall following SVB collapse, France and Germany downplay contagion risk

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    Not only will taxpayers not be liable for covering the deposits, but “the management of these banks will be fired,” he said.

    Once a bank is taken over by the government, “the people running the bank should not work there anymore.” Biden stressed that investors who bought into SVB were not getting bailed out. “They knowingly took a risk and when the risks didn’t pay off, investors lose their money. That’s how capitalism works,” he said.

    The World with AFP

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