Taxpayers nor customers will feel the brunt of Silicon Valley Bank’s and Signature Bank’s failures, US president Joe Biden today announced.
Instead, the money will be sourced from fees that US banks pay to the Federal Deposit Insurance Corporation.
There were fears that the overwhelming majority of deposits were uninsured, but decisive action seems to have been taken.
Biden said: “All customers with deposits in these banks can rest assured, they’ll be protected and they’ll have access to their money as of today.”
“America can have confidence that the banking system is safe,” he said touting the “immediate action” taken by his administration.
Invoking the rhetoric of his predecessor Donald Trump, Biden then moved on to other matters.
“The management of these banks will be fired,” he stated, par the course for when a bank is taken over by the FDIC.
Investors in the bank are also out of luck, and “will not be protected”. They knowingly took a risk that didn’t pay off.
“That’s how capitalism work,” said Biden.
He said he would make those responsible for the debacle accountable before stating that regulations will be introduced “to make it less likely this kind of bank failure will happen again”.
Biden, however, faces a divided house, making the likelihood of passing new legislation tenuous.