Joe Biden Promises to Hold Those Responsible for Silicon Valley Bank Mess 'Fully Accountable'

In response to Silicon Valley Bank's and Signature Bank's bankruptcies, President Joe Biden stated on Sunday that at his instruction, U.S. Treasury Secretary Janet Yellen and his top economic advisor Lael Brainard worked with financial regulators to guarantee that affected individuals and businesses could access their deposits. He also vowed to prosecute those accountable.

"I am pleased that they reached a prompt solution that protects American workers and small businesses, and keeps our financial system safe. The solution also ensures that taxpayer dollars are not put at risk," Biden said in the statement.

The president also said he is committed to fully holding those who caused the mess accountable. They will keep working to improve the regulation and oversight of larger banks so people do not end up in this situation again.

Officials from the Treasury gave a briefing to a group of lawmakers from both houses of Congress on Sunday evening, and Biden plans to talk about keeping a "resilient banking system" Monday, per CNN.

The administration decided to move forward with drastic emergency moves on Sunday to expand a federal backstop to all Silicon Valley Bank's deposits to guarantee access to all that money on Monday, said a senior Treasury official.

In response to mounting anxiety over the destiny of small businesses and people who were at risk of being unable to access their assets, the U.S. government took immediate action. It simultaneously announced a new Federal Reserve lending facility throughout a single weekend.

Silicon Valley Bank and Signature Bank customers will be allowed to access their funds on Monday, regardless of whether their balances exceed the $250,000 insurance maximum.

Authorities Seize the Assets of Signature Bank

Signature Bank, which had been accepting cryptocurrency deposits, was seized by the New York Department of Financial Services (NYDFS) on March 12, the Coin Telegraph noted.

The Federal Reserve added that the decision to shut down Signature Bank was taken to safeguard the American economy and boost public confidence in the banking system.

Also, a $25 billion fund was announced to support institutions that may experience future liquidity problems.

The agencies have "reached a solution that protects workers, small businesses, taxpayers, and our financial system," President Joe Biden tweeted to his 29.9 million followers on March 13.

Another Troubled Bank First Republic Bank Boosts Their Financial Health

First Republic Bank, another troubled institution, said it had improved its financial standing by securing loans from the Federal Reserve and JPMorgan Chase, AP reports.

The Federal Reserve, in a separate announcement late Sunday, unveiled a massive emergency lending program designed to avert a wave of bank runs that may jeopardize the integrity of the banking system and the economy.

The Fed explained that the initiative was like what other central banks have done for decades: lend freely to the banking sector so that clients would feel secure having access to their accounts anytime they needed to.

Instead of selling Treasuries or other securities to raise capital, banks that need to pay depositors can borrow from the Fed using this lending facility.

When customer withdrawals exceeded deposits, Silicon Valley Bank was compelled to sell some of its treasury at a loss.

This article is owned by Latin Post.

Written by: Bert Hoover

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