Speaking at the White House on Monday morning, President Biden addressed what his administration has done after two banks — Silicon Valley Bank and Signature Bank — were closed by bank regulators. Biden said, “Americans can rest assured that our banking system is safe. Your deposits are safe.”
JOE BIDEN: Today, thanks to the quick action of my administration over the past few days, Americans can have confidence that the banking system is safe. Your deposits will be there when you need them. Small businesses across the country that deposit accounts at these banks can breathe easier, knowing they'll be able to pay their workers and pay their bills. And their hardworking employees can breathe easier as well.
Last week, when we learned of the problems of the banks and the impact they could have on jobs, of small businesses, and banking system overall, I instructed my team to act quickly to protect these interests. They've done that. They've done that.
On Friday, the government regulator in charge, the FDIC, took control of Silicon Valley Bank's assets. And over the weekend, it took control of Signature Bank's assets. Treasury Secretary Yellen and a team of banking regulators have taken action, immediate action. And here are the highlights.
First, all customers who had deposits in these banks can rest assured. I want to have-- rest assured they'll be protected, and they'll 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.
No losses will be-- and this is an important point. No losses will be borne by the taxpayers. Let me repeat that. No losses will be borne by the taxpayers. Instead, the money will come from the fees that banks pay into the deposit insurance fund. Because of the actions of that-- because of the actions that our regulators have already taken, every American should feel confident that their deposits will be there if and when they need them.
Second, 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. Third, 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.
And fourth, there are important questions of how these banks got into the circumstance in the first place. We must get the full accounting of what happened and why those responsible can be held accountable. In my administration, no one-- in my-- no one is above the law. And finally, we must reduce the risk of this happening again.
During the Obama-Biden administration, we put in place tough requirements on banks like Silicon Valley Bank and Signature Bank, including the Dodd-Frank law to make sure that the crisis we saw in 2008 would not happen again. Unfortunately, the last administration rolled back some of these requirements.
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 and to protect American jobs and small businesses. Look, the bottom line is this. Americans can rest assured that our banking system is safe. Your deposits are safe.