United States President Joe Biden said on Monday that “Americans can rely on the soundness of the banking system” after the turmoil caused by the collapse on Friday of the California bank SVB.
“Your deposits will be available when you need them,” Biden said, speaking at the White House.
The president also said that taxpayers would not be urged to take losses from a bank failure, urging Congress to “strengthen” regulation of the sector, which was tightened after the Lehman Brothers bankruptcy in 2008 but later relaxed by Donald Trump. Trump Trump, Biden’s predecessor.
“We will not stop” and “will do whatever is necessary” to ensure that Americans have confidence in the soundness of the banking system, Biden said, at a time when confidence is needed to ensure that the Silicon Valley (SVB) problems spread widely. ).
Biden also said that investors and shareholders would not be immune from losses.
Based in Santa Clara, California, Silicon Valley Bank specialized in the technology sector and did business primarily with growth companies.
On Sunday, US authorities announced they would ensure the withdrawal of all deposits from the failed California bank and also allowed access to all deposits at another institution, Signature Bank, which was closed by the regulator.
In addition, the Federal Reserve System (FRS) – the US central bank – has committed to providing the necessary funds to other banks so that they can respond to withdrawals from their customers.
London, for its part, announced that the UK branch of SVB had been sold to British banking giant HSBC for a symbolic pound.
“UK SVB customers can access their deposits and banking services as usual from today,” the UK Treasury said in a statement.
The SVB situation illustrates the disruption of the entire US banking system in the face of the Fed’s monetary tightening.
Rising interest rates in the United States have encouraged clients to invest their money in financial products that guarantee higher returns than current accounts, draining a critical source for the emerging technology sector.
This wave of bank withdrawals last week caused great difficulty for three banks: SVB, Signature Bank, and Silvergate Bank, a small bank known for its privileged ties to the cryptocurrency environment.
The US authorities are now trying to find a buyer for the SVB as quickly as possible.
Author: Portuguese
Source: CM Jornal
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