Biden assures that the US banking system is safe: “Your deposits will be there when you need them”

President Joe Biden told Americans on Monday that the country’s financial systems are safe, seeking to provide calm after the rapid and staggering collapse of two banks, raising fears of a larger turmoil.

“Your deposits will be there when you need them,” he said.

U.S. regulators closed a Silicon Valley bank on Friday after it experienced a traditional banking operation in which depositors rushed to withdraw their funds immediately. It is the second-largest bankrupt in US history, second only to the Washington Mutual bankruptcy in 2008. But the financial bloodshed was swift; New York’s Signature Bank also failed.

The president, speaking from the White House shortly before his trip to the West Coast, said he would seek to bring those responsible to justice and pushed for better oversight and regulation of the big banks. And he promised that taxpayers would not suffer any losses.

“We need to get a full account of what happened,” he said. “Americans can rest assured that the banking system is safe.”

Biden also said that bank management should be fired. “If the bank is taken over by the FDIC, the people running the bank should no longer work there,” he said, referring to the Federal Deposit Insurance Corporation, the agency responsible for ensuring the stability of the banking system.

With over $110 billion in assets, Signature Bank is the third-biggest bank failure in US history. Another beleaguered bank, First Republic Bank, announced on Sunday that it has bolstered its financial health by accessing funding from the Fed and JPMorgan Chase.

The events made markets nervous when trading began on Monday. Asian and European markets fell, but not much, US futures fell.

In an effort to bolster confidence in the banking system, the Treasury Department, the Federal Reserve and the FDIC said Sunday that all Silicon Valley Bank customers will be protected and able to access their money.

“This move ensures that the US banking system continues to fulfill its vital role of protecting deposits and providing access to credit for households and businesses in a manner that promotes strong and sustainable economic growth,” the agencies said in a joint statement.

Under the plan, Silicon Valley Bank and Signature Bank depositors, including those whose assets exceed the $250,000 insurance limit, will be able to access their money on Monday.

The UK also acted quickly, working over the weekend to arrange the sale of Silicon Valley Bank UK Ltd., the UK arm of the California bank, for a nominal £1.

Although the bank is small, with less than 0.2% of UK bank deposits, according to central bank statistics, it has played a big role in funding technology and biotech start-ups that the British government is counting on to boost economic growth.

Jeremy Hunt, head of the UK Treasury, said some of the country’s leading tech companies may have been “destroyed”.

“When you have very young companies, very promising companies, they are also fragile,” Hunt told reporters, explaining why the authorities acted so quickly. “They need to pay their employees and they were worried that they might literally not have access to their bank account at 8am today.”

Jessica Aguirre of NBC Bay Area and business and tech reporter Scott Badman discuss the collapse of Silicon Valley Bank and what it means for the Bay Area.

He stressed that there has never been “systemic risk” for the British banking system.

The Silicon Valley Bank began sliding into insolvency when it was forced to sell off some of its Treasury bonds at a loss to fund withdrawals from its clients. Under the new Fed program, banks can place these securities as collateral and borrow under the emergency loan.

The Treasury provided $25 billion to cover any losses incurred. Fed officials said, however, that they do not expect any of this money to be used, given that the securities placed as collateral have a very low risk of default.

While Sunday’s moves marked the largest government intervention in the banking system since the 2008 financial crisis, these actions are relatively limited compared to what was done 15 years ago. The two failing banks themselves were not bailed out and taxpayers’ money was not provided to them.

Some prominent Silicon Valley executives feared that if Washington didn’t bail out their bankrupt bank, customers would run into other financial institutions in the coming days. Over the past few days, share prices have fallen in other banks that serve technology companies, such as First Republic and PacWest Bank.

The bank’s clients include a number of companies in the California wine industry, where many wineries rely on the Silicon Valley Bank for loans, and tech startups dedicated to combating climate change.

Tiffany Dufoux, founder and CEO of The Cru, a New York-based career coaching platform and community for women, posted a video to LinkedIn Sunday from an airport restroom, saying the banking crisis is testing her resilience.

Given that her money was tied to a Silicon Valley bank, she had to pay her employees from her personal bank account. With two teenagers going to college, she said, she was relieved to know that the government’s intention is to make savers healthy.

“Small businesses and early stage startups don’t have much access to leverage in a situation like this and we are often in a very vulnerable position, especially when we have to fight so hard to get transfers to your bank. for starters, especially for me as a black female founder,” Dufu said.

Rugaber and Megerian reported from Washington. Sweet and Bussevitz reported from New York. Associated Press contributors Hope Yen of Washington, Jennifer McDermott of Providence, Rhode Island, and Danica Kirka of London contributed to this report.