President Biden claims American banking system stays secure following collapse of two US banks, blames Trump administration for disaster3 min read
US President Joe Biden on Monday (native time) stated the American banking system stays secure following the collapse of two US banks — Silicon Valley Bank and Signature Bank.
“Small businesses across the country that had accounts at Silicon Valley Bank and Signature Bank can breathe easier knowing they’ll be able to pay their workers. It won’t cost taxpayers a dime. This is paid for with the fees that banks pay into Deposit Insurance Fund,” stated Biden. However, the failures have nonetheless created concern amongst prospects who maintain their cash in different similarly-sized banks.
US regulators closed the Silicon Valley Bank on Friday after it skilled a standard financial institution run, the place depositors rushed to withdraw their funds all of sudden. It is the second largest financial institution failure in U.S. historical past, behind solely the 2008 failure of Washington Mutual.
In an indication of how briskly the monetary bleeding was occurring, regulators introduced that New York-based Signature Bank had additionally failed.
Biden underscored that the American banking system stays “safe” as he laid out how his administration is taking motion to comprise the collapse.
He blamed the earlier US administration for the banking failure. Biden stated, “During the Obama-Biden administration, we put in place tough requirements on banks like Silicon Valley Bank and Signature Bank, including Dodd-Frank Law, to make sure that the crisis we saw in 2008 would not happen again. Unfortunately, the last administration rolled back some of these requirements. I am going to ask Congress and banking regulators to strengthen the rules for banks to make it less likely this kind of bank failure would happen again and to protect American jobs and small businesses.”
Meanwhile, at First Republic Bank in Studio City Monday morning, there was a gradual stream of consumers taking their cash out and transferring it to larger banks.
This got here amid worries about what could also be subsequent to topple following the second-and third-largest financial institution failures in US historical past.
The strain is majorly on the regional banks a few steps beneath in measurement of the huge, “too-big-to-fail” banks that helped take down the economic system in 2007 and 2008.
Shares of First Republic plunged 62.6 per cent, even after the financial institution stated Sunday it had strengthened its funds with money from the Federal Reserve and JPMorgan Chase, reported ABC 7.
Amid the turmoil, the First Republic in a response to Eyewitness News, tried to reassure its nervous prospects.
“We’re continuing to fully serve the needs of our clients by opening accounts, making loans, executing transactions and delivering exceptional service at our offices and online,” First Republic stated in a press release.
Huge banks, which have been repeatedly stress-tested by regulators following the 2008 monetary disaster, weren’t down as a lot. JPMorgan Chase fell 1.2 per cent, and Bank of America dropped 3.9 per cent.
First Republic Bank is small in comparison with the nation’s largest banks.
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