President Biden says ‘banking system is safe’ following collapse of 2 U.S. banks
President Joe Biden aimed to reassure the public Monday about the stability of the U.S. banking system following the financial collapse of two U.S. banks.
“Americans can have confidence the banking system is safe,” said President Joe Biden. “Your deposits will be there when you need them.”
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President Biden said the federal government has taken over Silicon Valley Bank and New York Signature Bank.
He stressed that taxpayers will not foot the bill.
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“No losses will be borne by the taxpayers,” Biden said. “Instead, the money will come from the fees that banks pay into the deposit insurance fund.”
Our Washington News Bureau spoke with Republicans on the House Financial Services Committee, which is responsible for overseeing economic issues.
“We need to dig in and find out what really happened,” said Rep. Barry Loudermilk (R-GA), a GOP member of the House Financial Services Committee. “That’s really where we are right now, just informational gathering.”
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“I don’t think it’s time to panic,” said Rep. Ralph Norman (R-SC), another GOP member of the House Financial Services Committee. “I think it’s time to ask questions.”
Norman said we can expect to see more committee meetings and hearings in the coming weeks about this matter and had this message for the public.
“It’s important to know this is one bank,” Norman said. “I think your mom-and-pop banks for the most part are sound but I do think for those watching, call your banks. Ask questions. Look at your accounts.”
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Some Republicans are arguing President Biden’s economic policies hurt the financial system.
“What would help Samantha is for this administration to get real about the economy,” said Norman to Washington Correspondent Samantha Manning. “It’s his policies that are to blame for the troubles the economy has and don’t take my word, ask the businessman on the street.”
Some Democrats, meanwhile, point to the 2018 rollbacks of bank regulations under the Trump administration.
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“I am urgently calling for a House Financial Services Committee hearing to investigate the bank’s collapse and how Republicans’ 2018 bank deregulation bill contributed to SVB’s risky behavior and jeopardized financial stability for far too many,” said Rep. Ayanna Pressley (D-MA), a Democrat on the House Financial Services Committee.
President Biden said he’s calling on Congress and the bank regulators to beef up regulations, but House Republicans we spoke with said that move is premature.
“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 could happen again,” Biden said.
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“Asking Congress to react before we have all the information, that’s irresponsible,” Loudermilk said.
The Republican Chairman of the House Financial Services Committee released a statement saying he’s confident in the regulations already in place.
“At this time, it is important to remain levelheaded and look at the facts—not speculation—when assessing the right path forward,” said Rep. Patrick McHenry (R-NC), the GOP Chairman of the House Financial Services Committee. “I have confidence in our financial regulators and the protections already in place to ensure the safety and soundness of our financial system.”
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