President Joe Biden spoke out Monday morning in an effort to reassure Americans there is no need for panic after federal agencies stepped in following the failures of two big banks over the weekend.
"Americans can rest assured that our banking system is safe. Your deposits are safe. Let me also assure you, we will not stop at this. We'll do whatever is needed," Biden said from the White House.SourceMoneyGuru-https://www.mgkx.com/3825.html
The federal government said Sunday that all depositors at Silicon Valley Bank and Signature Bank will be protected and be able to get access to their money Monday morning, with the funds coming from a special fund set up by the nation's banks and from the sale of the banks' assets, not from taxpayers.SourceMoneyGuru-https://www.mgkx.com/3825.html
"No losses will be borne by the taxpayers," Biden repeated in his remarks.SourceMoneyGuru-https://www.mgkx.com/3825.html
"Because of the actions that our regulators have already taken, every American should feel confident that their deposits will be there if and when they need them," he continued. "Second, the management of these banks will be fired. If the bank is taken over by FDIC, the people running the bank should not work there anymore."SourceMoneyGuru-https://www.mgkx.com/3825.html
"Third, 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. And fourth, are important questions of how these banks got into the circumstance in the first place. We must get the full accounting of what happened and why those responsible can be held accountable," he said.SourceMoneyGuru-https://www.mgkx.com/3825.html
Biden also pledged that he would take action to "reduce the risks of this happening again," pointing the finger at the Trump administration for, according to Biden, rolling back some of the requirements the Obama administration put in place during their administration.SourceMoneyGuru-https://www.mgkx.com/3825.html
"Unfortunately, the last administration rolled back some of these requirements. I'm going to ask Congress and the 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," Biden said.SourceMoneyGuru-https://www.mgkx.com/3825.html
His comments came just before U.S. markets opened to plunging bank stocks and before he departed on a previously scheduled trip to California.SourceMoneyGuru-https://www.mgkx.com/3825.html
On Capitol Hill, Biden administration officials from the Treasury Department and FDIC were set to brief all Senate Republicans Monday on the response after many lawmakers missed Sunday night's hastily-scheduled bipartisan, bicameral briefing.SourceMoneyGuru-https://www.mgkx.com/3825.html
Sen. Elizabeth Warren, D-Mass., is out front arguing the bank failures were "entirely avoidable" had Congress not passed a law in 2018 to ease regulations in the Dodd-Frank Act made after the 2008 financial crisis.SourceMoneyGuru-https://www.mgkx.com/3825.html
"No one should be mistaken about what unfolded over the past few days in the U.S. banking system: These recent bank failures are the direct result of leaders in Washington weakening the financial rules," Warren wrote in an op-ed in The New York Times.SourceMoneyGuru-https://www.mgkx.com/3825.html
She ticked through exemptions she said led to the two big banks failing and called on Congress to now repeal the 2018 bank deregulation bill.SourceMoneyGuru-https://www.mgkx.com/3825.html
"Had Congress and the Federal Reserve not rolled back the stricter oversight, S.V.B. and Signature would have been subject to stronger liquidity and capital requirements to withstand financial shocks," she wrote. "They would have been required to conduct regular stress tests to expose their vulnerabilities and shore up their businesses. But because those requirements were repealed, when an old-fashioned bank run hit S.V.B., the bank couldn't withstand the pressure -- and Signature's collapse was close behind."SourceMoneyGuru-https://www.mgkx.com/3825.html
Sen. Bernie Sanders, I-Vt., shared her sentiment and also pinned blame on former President Donald Trump for signing what he called the "absurd" deregulation bill.SourceMoneyGuru-https://www.mgkx.com/3825.html
"Now is not the time for U.S. taxpayers to bail out Silicon Valley Bank. If there is a bailout of Silicon Valley Bank, it must be 100 percent financed by Wall Street and large financial institutions," Sanders said in a statement Sunday.SourceMoneyGuru-https://www.mgkx.com/3825.html
Despite the Biden administration maintaining that the federal government will not be bailing out Silicon Valley Bank investors, nor will taxpayers, some Republicans have already labeled the administration's response as the "Biden Bailout."SourceMoneyGuru-https://www.mgkx.com/3825.html
Republican presidential candidate Nikki Haley said in a statement Monday that Biden "is pretending this isn't a bailout" and that taxpayers will be responsible, despite Biden's assurances.SourceMoneyGuru-https://www.mgkx.com/3825.html
David McIntosh, president of the conservative, anti-tax group Club for Growth, pushed back on new regulations floated by Biden and said, "The Biden bank bailout is a result of Biden's failed economic policies."SourceMoneyGuru-https://www.mgkx.com/3825.html
ABC News' Molly Nagle, Trish Turner and Brittany Shepherd contributed to this report.SourceMoneyGuru-https://www.mgkx.com/3825.html SourceMoneyGuru-https://www.mgkx.com/3825.html
