President Biden and Democrat lawmakers praised the “decisive action” by federal financial agencies on Sunday to protect Silicon Valley Bank depositors and shore up the financial system ahead of markets opening on Monday.
“The American people and American businesses can have confidence that their bank deposits will be there when they need them,” Biden said in a statement Sunday, adding he would deliver remarks on how to protect the banking system on Monday.
“I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again,” he added.
The Department of the Treasury, Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) announced in a joint statement on Sunday that depositors of the Silicon Valley Bank will be able to access all of their funds on Monday.
Democrats lauded the decision, saying that it will not only protect the bank, but its customers and workers who relied on the bank for their paychecks.
“This decisive action taken by regulators to fully protect all Silicon Valley Bank deposits will ensure that millions of workers across the country will be paid on time — and it will limit the potential damage to California’s and the nation’s economy,” Sen. Alex Padilla (D-Calif.) said in a statement Sunday.
“It is also important to note that taxpayers will not be on the hook for this critical resolution, and the protections do not extend to shareholders.”
Regulators were reportedly seeking to auction off SVB Sunday afternoon, however it’s unclear if those efforts will continue into Monday given the action announced by the Treasury and others.
Treasury Secretary Janet Yellen and lawmakers spoke out on Sunday against the possibility of a bailout to save the bank and its shareholders, saying efforts would instead focus on making depositors in the bank whole.
Rep. Jimmy Panetta (D-Calif.) echoed a similar sentiment in a statement issued Sunday.
“These actions by the Treasury, Federal Reserve, and FDIC, are absolutely necessary to protect not the bank, but the bank’s customers, who were put at risk through no fault of their own,” Panetta said in a statement.
“In the days ahead, we must fully determine what caused this crisis, and what must be done to better protect customers deposits in the future.”
Rep. Eric Swalwell (D-Calif.) said that agencies should investigate whether there was a “manipulation of the markets” amid the bank’s closure.
“Going forward, we must hold bank mismanagement accountable and investigate whether there was any shorting or manipulation of markets,” he said in a statement.
Swalwell also blasted former President Trump and Republicans in 2018 for passing the Reform Act in 2018 that lifted regulations on the bank.
“As to the ‘how could this happen’ concern, it’s clear that the efforts by former President Trump and Kevin McCarthy to pass the ‘Reform Act’ in 2018 inoculated Silicon Valley Bank from stress tests and regulation that would have prevented this crisis,” he added.
“This is a lesson: the weakening of bank regulations for small and medium sized banks allowed this mismanagement to go unchecked.”