US President Joe Biden commented on the recent collapse of Signature and Silicon Valley banks.
On March 13th, the President of the United States, Joe Biden, used Twitter to claim that all those responsible for the collapse of Silicon Valley Bank (SVB) and Signature Bank will be held accountable.
Biden pledged his full commitment to identifying and bringing to book all responsible parties. He also assured the public that his government will continue its “efforts to strengthen oversight and regulation of larger banks” to avoid similar collapses.
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I’m firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.
Biden also stated that agencies working on the SVB and Signature cases have reached a solution that will protect taxpayers, workers, small businesses, and the country’s financial system.
However, Biden said on a Monday morning briefing that the plan to protect parties affected by the collapse of the two banks will not apply to the investors in the banks. He explained that they took the risk knowingly.
Investors in the banks will not be protected. They knowingly took a risk and when the risk didn’t pay off, investors lose their money. That’s how capitalism works.
Despite the challenges, the US President reassured the public that they can have confidence in the country’s banking system.
Regulators shut down the Signature bank, a few days after taking a similar move towards the Silicon Valley Bank. The Federal Deposit Insurance Corporation (FDIC) took control of the two banks to protect the depositors and ensure they can access their funds.
Meanwhile, the United States Securities Exchange Commission (SEC) is planning to crack down on any misconduct that threatens the US economy. In a March 12th statement, SEC Chair Gary Gensler said the agency will go after the violators of federal security laws.
In times of increased volatility and uncertainty, we at the SEC are particularly focused on monitoring for market stability and identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly.
Earlier this month, Biden’s administration introduced a 2024 budget with a suggestion to implement a 30% tax on crypto mining electricity costs.