President Joe Biden on Monday reassured Individuals that their banking system is safe within the wake of the collapse of SVB and mentioned he needs more durable rules to stop future crises.
“Individuals can believe that the banking system is protected. Your deposits will probably be there while you want them,” Biden mentioned in televised remarks from the White Home after Silicon Valley Financial institution’s failure and the federal takeover of a second financial institution.
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Whereas the federal government is making certain that SVB depositors get their a reimbursement, “no losses will probably be borne by the taxpayers,” Biden mentioned.
“The cash will come from the charges that banks pay into the deposit insurance coverage.”
Biden challenged Congress to enact extra stringent rules, saying that “powerful” safeguards introduced in after the 2008 monetary collapse had been undone underneath his Republican predecessor Donald Trump.
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“I will ask Congress and the banking regulators to strengthen the principles for banks to make it much less doubtless this type of financial institution failure would occur once more,” Biden mentioned.
He made clear he expects the implications to fall on the shoulders of these accountable and that the federal government’s fast response over the weekend was not a financial institution bailout, as occurred in 2008.
“We should get the complete accounting of what occurred and why, (so) these accountable may be held accountable,” he mentioned.
Not solely will taxpayers not be answerable for overlaying the deposits, however “the administration of those banks will probably be fired,” he mentioned.
As soon as a financial institution is taken over by the federal government, “the folks working the financial institution mustn’t work there anymore.”
Biden burdened that buyers who purchased into SVB weren’t getting bailed out.
“They knowingly took a danger and when the dangers did not repay, buyers lose their cash. That is how capitalism works,” he mentioned.
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