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“Americans can rest easy: America’s banking system is secure.” This was stated by Joe Biden, after the closure of the Silicon Valley Bank. “No losses will be borne by the taxpayers”, assured the American president regarding the government’s promise that all the bank’s deposits will be repaid. Then another reassurance: “Your deposits are safe”.
Biden: “We need stricter rules for banks”
Biden, in his speech, also explained that he wants to ask Congress and the regulatory authorities to strengthen the rules for banks. And he added that the managers of the banks that have proved to be in trouble should be fired.
US government intervention
Meanwhile, it has emerged that the bank’s American customers will be reimbursed, at least for the protected part, by the Federal Deposit Insurance Corp. It will be the federal authority to sell the group’s assets left after the bank run that caused the commercial bank to go bankrupt. in order to recover the resources and return as much money as possible to those who are left empty-handed. The Treasury, the FDIC and the Fed announced that all deposits with SVB are available starting today, even those above $250,000 insured by the Federal Deposit Insurance Corp. In addition, the central bank is providing a new liquidity window to help banks to respond to customer requests in case of escape. “Depositors are protected” while holders of shares and bonds are wiped out, says the Treasury thus confirming the line of Janet Yellen who, quite clearly, said that there would be no bailout.