Following the collapse of Silicon Valley Bank, US President Joe Biden assured Americans on Monday that their banking system is secure and voiced his desire for stricter regulations to avoid such disasters.
Both Silicon Valley Bank and Signature Bank have partnerships with companies that deal in cryptocurrency, making them their preferred banking partners. With both banks now shut down, questions about how they will continue to facilitate payments in the crypto industry as a whole are raised. SVB and Signature have both been identified by the Fed and Treasury Department as systemic risks to the financial system.
“Americans can have confidence that the banking system is safe. Your deposits will be there when you need them. While the government is ensuring that SVB depositors get their money back, “no losses will be borne by the taxpayers. The money will come from the fees that banks pay into the deposit insurance,” Mr Biden said.
He made it clear that he expects those accountable to bear the consequences and that the government’s quick action over the weekend did not entail a bank bailout, as was the case in 2008.
“We must get the full accounting of what happened and why, (so) those responsible can be held accountable. Not only will taxpayers not be liable for covering the deposits, but the management of these banks will be fired,” he said.
On Sunday, officials intervened to compensate Silicon Valley depositors. Meanwhile, the Fed declared that it would begin a Bank Term Financing Program, which would provide banks with additional funding to satisfy the demands of their depositors. Moreover, regulators shut down Signature Bank over the weekend
All deposits from Silicon Valley Bank have been transferred to a newly established bridge bank, according to a Monday announcement from the U.S. Federal Deposit Insurance Corporation. As a result, all account holders will have access to their money starting on Monday morning.