This Monday, March 13, the President of the United States of America, Joe Biden, made a statement in the Roosevelt Room of the White House prior to his trip to California.
Three days after the public failure of Silicon Valley Bank (SVB), Mr. Biden left a message of tranquility and solidity for the national banking system:
“Rest assured: the banking system is sound, your deposits are safe” and “they will be available when you need them,” he said.
The bankruptcy of SVB, announced this Friday, threatened to destabilize confidence in the banking system, but Biden invites to trust the system and stresses that “All users with deposits in these banks can rest assured that their funds will be protected and they will have access to their money”.
In the event of a bank failure, regulators cover deposits up to $250,000, but 96% of the bank’s funds exceeded that limit and were not guaranteed.
Biden also included that there will be no loss to taxpayers since their money will come out of what the banks pay into the insurance deposit fund.
Regarding management, he said that the leaders of these banks will be removed when the federal banking administration takes over, since they have taken risks that they were not protected against and that have resulted in failure. “When they take risks, investors lose money,” he concluded.