Banking crisis:President Joe Biden says taxpayer funds won't be used to bail out SVB, Signature bank

[BumRushDaShow]

Last edited Mon Mar 13, 2023, 11:30 AM - Edit history (3)

Source: USA Today

WASHINGTON – President Joe Biden attempted to calm market and taxpayer jitters on Monday morning, saying that Americans can have "confidence" in the banking system after the collapse of Silicon Valley Bank.

"Americans can have confidence that the banking system is safe," Biden said at the White House. "Your deposits will be there when you need them." Biden said "no losses" would be borne by taxpayers, and the money would come from the fees that banks pay into the Deposit Insurance Fund.

The Federal Deposit Insurance Corporation, or FDIC, took control last week of SVB's assets after the bank ran out of cash. Federal regulators also assessed over the weekend that Signature Bank of New York presents a systemic risk and took it over. Biden said Monday that managers of the banks would be fired, and investors would not be protected.

Customers of the banks, including small businesses that need to make payroll, will have immediate access to their money, the president said. "Every American should feel confident that their deposits will be there, if and when they need them," Biden said.

Read more: https://www.usatoday.com/story/news/politics/2023/03/13/silicon-valley-signature-bank-collapse-joe-biden-taxpayer-funds/11463729002/

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This seems to be the only (non-tabloid) article to make mention that Biden's remarks included the fact that Signature's management "will be fired".

Signature was a primary crypto-bank.


Article updated.

Previous articles/headline -

WASHINGTON - President Joe Biden attempted to calm market and taxpayer jitters on Monday morning, saying that Americans can have "confidence" in the banking system after the collapse of Silicon Valley Bank.

"Americans can have confidence that the banking system is safe," Biden said at the White House. "Your deposits will be there when you need them."

Biden said "no losses" would be born by taxpayers, and the money would come from the fees that banks pay into the Deposit Insurance Fund.

Federal regulators also assessed over the weekend that Signature Bank of New York presents a systemic risk and said they were taking it over. Biden said Monday that managers of the banks would be fired, and investors would not be protected.

Banking crisis: President Joe Biden says taxpayer funds won't be used to bailout SVB, Signature bank

Original article -

WASHINGTON -- President Joe Biden attempted to calm market and taxpayer jitters on Monday morning, saying in remarks that Americans can have "confidence" in the banking system after the collapse of Silicon Valley Bank.

"Americans can have confidence that the banking system is safe. Your deposits will be there when you need them," Biden said from the White House. Biden said "no losses" would be born by taxpayers, and the money would come from the fees that banks pay into the Deposit Insurance Fund.

Federal regulators also assessed over the weekend that Signature Bank of New York presents a systemic risk and they were taking it over. Biden said that managers of the bank would be fired and investors would not be protected. Dow futures fell more than 300 points on Monday morning as the markets prepared to open.

Silicon Valley Bank's failure is the second largest since the 2008 financial crisis and came after struggling tech companies made a run on the bank, withdrawing cash at a rapid pace and forcing the bank into a position where it had to sell bonds at a loss to cover the withdrawals.

[brewens]

1. I'm okay with taxpayer funds being used. Slap a one time tax on the 1% to cover it. If they

start having to pay for their screwups we might see fewer.

[moonshinegnomie]

5. the other banks will have to pay instead of taxpayers

when the fed does something like this it imposes a fee on all the other FDIC banks to pay for it.

[IronLionZion]

2. Most news media is not explaining this situation very well

leading to a lot of misunderstanding

CNN has a good bullet list:

https://www.cnn.com/business/live-news/silicon-valley-bank-collapse-updates-03-13-23

Customers' deposits will be protected: Customers will "have access to their money as of today. That includes small businesses across the country that bank there and need to make payroll, pay their bills and stay open for business," Biden said, adding that no losses will be suffered by the taxpayers.

"Instead, the money will come from the fees that banks pay into the deposit insurance fund," he explained.

The management of these banks will be fired: "If the bank is taken over by FDIC, the people running the bank should not work there anymore," Biden said.

Investors in the banks will not be protected: "They knowingly took a risk and when the risk didn't pay off, investors lose their money. That's how capitalism works," Biden added.

Logging a full account of what happened: Biden stressed the importance of holding those responsible accountable. "In my administration, no one is above the law," he said.

Reducing the risk of this happening again: Citing the requirements put in place during the Obama administration, including the Dodd-Frank Act, Biden said there were rules in place to prevent a repeat of 2008. But he added that the Trump administration rolled some of these regulations back.

"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 would happen again," he said. "And to protect American jobs and small businesses."

Reassuring that while the banking system is safe, he also said the administration will not stop at this.

[BumRushDaShow]

7. Problem is

CNN is doing it as one of those "live updates" things that is a no-go for LBN. It's bad enough that the non-"live updates" online news media updates their stories and headlines way too frequently as if they were "live updates", which makes it difficult for LBN.

[IronLionZion]

9. I googled and didn't find any good articles yet

ideally someone like Vox would put out an explainer eventually

[BumRushDaShow]

10. His remarks were literally just under 5 minutes

It's not like they had to digest and summarize a 30 - 45 minute speech.

Starts at 15.35 -

[The Jungle 1]

17. The Bank employees were given last minute bonus checks!

They got the bonus checks hours before regulators took over.
Here is a couple million, your fired.
https://www.cnbc.com/2023/03/11/silicon-valley-bank-employees-received-bonuses-hours-before-takeover.html

[IronLionZion]

18. Sounds like a reward for bad behavior

to encourage more to do the same.

[Voltaire2]

3. Changing the rules when the billionaires lose is just a bad deal.

[SheltieLover]

4. Good!

[sanatanadharma]

6. My opinion: Crypto currency does not deserve US treasury support

US dollars should not be used to replace crypto dollars. Crypto currency does not deserve US treasury support.
Investors chose to take the risk of virtual money; their reward can be virtual.

[moonshinegnomie]

11. the treasury isnt supporting crypto money

they are backstopping real deposits

[LetMyPeopleVote]

8. Here is President Biden's statement

Link to tweet

[BumRushDaShow]

14. And THOSE were the key points

[republianmushroom]

12. Thank you, Joe.

[blue-wave]

13. Fed announces "Bank Term Funding Program"

to maintain liquidity:

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm

[riversedge]

15. I am glad Biden made a statement.

[BumRushDaShow]

16. And it was to the point too

I was hoopin' and hollering here.

[friend of a friend]

19. So, people can now put as much money in a bank as they want and not worry

about the $250,000 maximum insurance?

[BumRushDaShow]

20. Here is what FDIC announced --

Press Release
FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors of Silicon Valley Bank, Santa Clara, California

Friday, March 10, 2023

For Immediate Release

Last updated: March 12, 2023

WASHINGTON – Silicon Valley Bank, Santa Clara, California, was closed today by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank.

All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.

Silicon Valley Bank had 17 branches in California and Massachusetts. The main office and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023. The DINB will maintain Silicon Valley Bank’s normal business hours. Banking activities will resume no later than Monday, March 13, including on-line banking and other services. Silicon Valley Bank’s official checks will continue to clear. Under the Federal Deposit Insurance Act, the FDIC may create a DINB to ensure that customers have continued access to their insured funds.

As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.

Customers with accounts in excess of $250,000 should contact the FDIC toll–free at 1-866-799-0959.

The FDIC as receiver will retain all the assets from Silicon Valley Bank for later disposition. Loan customers should continue to make their payments as usual.

Silicon Valley Bank is the first FDIC–insured institution to fail this year. The last FDIC–insured institution to close was Almena State Bank, Almena, Kansas, on October 23, 2020.

FDIC: PR-16-2023

https://www.fdic.gov/news/press-releases/2023/pr23016.html

Basically it sound like they will be covering the $250K and anything over that will be clawed out of remaining asset, asset sales, etc.