President of the United States Joe Biden declared today (Monday) that the American banking system is "safe" and committed to tighter banking regulation, following the collapse of Silicon Valley Bank and Signature Bank.
"Americans can rest assured that the banking system is safe. Your deposits will be there when you need them," Biden said.
Bank managers will be fired, Biden added, and investors will lose money.
"They took the risk knowingly, and when the risk didn't pay off, they lost their money. That's how capitalism works."
Biden promised new regulation after the collapse of Silicon Valley Bank - the biggest bank collapse since the 2008 financial crisis.
"I will ask Congress and the regulators of the banking system to strengthen the laws on banks so that something like this, like a bank failure, does not happen again, and to protect American jobs," the president added.
Silicon Valley Bank (Photo: GettyImages, Justin Sullivan)
Signature Bank (Photo: Reuters)
Biden's economic team worked over the weekend with regulators on measures such as guaranteeing deposits at both banks, new access for banks to emergency funds and better terms for banks that want to borrow from the Federal Reserve in times of emergency.
Despite the feeling of relief in light of the new measures, some fear the consequences of the collapse of the banks on the global markets this week.
Indeed, declines are now being recorded (Monday) in the leading indices in electronic trading before the opening of trading on Wall Street.
Trading in First Republic Bank stock was halted, after it fell more than 60% on the pre-opening Mesler, as well as Pequest stock, which fell 40%.
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