President Biden Reassures Americans of Financial System Safety Following Bank Closures

President Joe Biden on Monday sought to reassure Americans that the nation’s financial systems were safe, following the sudden closure of two banks that had sparked fears of a broader economic upheaval.

The U.S. Treasury, Federal Reserve, and Federal Deposit Insurance Corporation (FDIC) have announced that all deposits at Silicon Valley Bank (SVB) and Signature Bank, both of which were shut down by federal authorities on Friday, will be guaranteed.

The government has also stated that the measures taken to protect SVB deposits will not be funded by taxpayers. The closure of the Silicon Valley Bank was prompted by a traditional bank run, where depositors rushed to withdraw their funds all at once.

In a statement from the White House, President Biden said he would seek to hold those responsible accountable, and called for better oversight of the nation’s financial systems. A senior Treasury official also clarified that the measures taken did not constitute a “bailout”.

Shareholders and bondholders of the failed banks will not be compensated for their losses. The FDIC has said that it will work with the banks to ensure that customers are not adversely affected by the closures.