Biden is “firmly committed” to “holding those responsible for this mess fully accountable”
The governor of California applauds the measure because it “calms nerves and has a positive impact” in the state
The Treasury Department has ordered this Sunday the Federal Deposit Insurance Corporation (FDIC) to guarantee the funds of Silicon Valley Bank clients, which they will be able to access starting Monday.
“Depositors will have access to all their money starting Monday, March 13. Any loss associated with the Silicon Valley Bank resolution will be borne by the taxpayer,” according to a joint statement from the US Treasury, the FDIC and the Federal Reserve, which state that shareholders and some unsecured debtors will not be protected.
The objective is to “guarantee public confidence in the United States banking system,” said the US Treasury Secretary, Janet Yellen.
The Silicon Valley Bank (SVB), a financial institution with an important client portfolio among technology ‘startups’, was finally intervened by the FDIC last Friday due to doubts about its liquidity and solvency.
Federal authorities have been working over the weekend on possible formulas to guarantee client funds, mainly by lobbying for another entity to acquire the bank. This Sunday the auction to bid for the entity was opened, according to CNN, but finally the solution has not come from the private sector.
As of December 31, 2022, the SVB had “approximately” 209,000 million dollars (196,192 million euros) in assets and “around” 175,400 million dollars (164,651 million euros) in deposits, according to the FDIC.
The country’s president, Joe Biden, has expressed that he is “pleased” that the “quick fix” was taken, since it protects American workers and keeps the country’s financial system safe.
“The American people and American businesses can trust that their bank deposits will be there when they need them,” Biden said, according to a White House statement.
Likewise, the president, who has announced that this Monday he will explain “how to maintain a resilient banking system” to protect the economic recovery, has shown himself “firmly committed” to “holding those responsible for this mess fully accountable.”
For this reason, it has indicated that it will continue its efforts to strengthen the supervision and regulation of the largest banks in order to avoid this situation in the future.
“ACTIONS THAT CALM THE NERVES”
The governor of California, Gavin Newsom, has issued a statement in which he points out that the actions of the US government “have calmed the nerves and have had a profoundly positive impact in California.”
“The Biden Administration has acted quickly and decisively to protect the American economy and strengthen public confidence in our banking system,” he added.
Thus, he has considered that, as “California is a pillar of the American economy, federal leaders “have done the right thing, by ensuring that the innovation economy can continue to grow and move forward.”
