President Biden on Monday expressed confidence that the U.S. banking system is safe and Americans can access their deposits after regulators closed two banks in recent days.
“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,” Biden said in remarks before departing for California.
The president sought to reassure the public and financial markets that his administration had the situation under control after regulators late last week took control of Silicon Valley Bank, which catered to the startup and venture capital-funded tech world. Regulators in New York on Sunday closed Signature Bank of New York amid growing uncertainty about the stability of the banking system.
The president said the government would pursue a “full accounting” of how Silicon Valley Bank collapsed and why, adding that lawmakers must act to prevent it from happening again.
The Treasury Department on Sunday announced it would backstop all deposits at those banks, not just up to $250,000 as insured by federal law.
A Treasury Department official told reporters the move was necessary to stabilize the banking system and protect workers who could be directly affected by the collapse of Silicon Valley Bank.
“Because of the action our regulators have already taken, every American should feel confident their deposits will be there when they need them,” Biden said Monday.
Biden stressed the efforts to backstop all deposits would not be covered by taxpayers, but would instead be funded by fees that banks pay into a Federal Deposit Insurance Corp. fund. He also said managers of the shuttered banks would be fired and held accountable.
Biden on Monday also said he would ask Congress to strengthen rules regulating the banking system after some provisions were rolled back during the Trump administration.
Then-President Trump in 2018 signed a measure that exempted certain small and regional banks from regulations passed under Dodd-Frank in the wake of the 2008 financial crisis. The 2018 bill passed when both chambers of Congress were controlled by Republicans, but the bill received Democratic support in both the House and Senate.
Updated at 11:18 a.m.