After the failure of Silicon Valley Bank and Signature Bank, which threatened to set off a more widespread crisis, U.S. regulators were forced to step in with a series of emergency measures. In response, President Joe Biden addressed the White House on Monday and declared that the US banking system was “safe” and pledged to impose stricter regulations on banks.
Bank Managers To Be Fired
The speech by President Biden, along with the swift actions taken by regulators over the weekend, comes out as an effort to stop future bank runs. On Sunday, the financial authorities in the United States guaranteed that all deposits made by customers of Silicon Valley and Signature Bank would be returned. However, Biden stressed on the fact that the managers of the banks will be fired, and investors will lose money — reiterating statements from his administration made over the weekend.
Biden in his remark was quoted as saying:
They knowingly took a risk, and when the risk didn’t pay off his adjusters lose their money. That’s how capitalism works.
The U.S. Federal Deposit Insurance Corporation announced on Monday that it had transferred all deposits from Silicon Valley Bank to a freshly formed bridge bank and that all account holders would have access to their money commencing Monday morning. This news came just a day after the FDIC said it had closed down Silicon Valley Bank.
Newer Rules For Tighter Security?
Furthermore, Biden appeared to bring in newer regulations for the first time after the 2008 crisis. He asserted that he would ask Congress and regulators to strengthen rules to make sure such scenarios are less likely to happen in order to protect American jobs and other small businesses.
The Silicon Valley Bank was forced to lock its doors by a state regulator in California after the bank was unable to keep up with an increase in the number of withdrawals on Friday. While, on the other hand, an official from the NYDFS seized Signature Bank on Sunday “to protect depositors.”
Both Signature Bank and Silicon Valley Bank cooperated with companies that deal in cryptocurrencies, thus making them their preferred banking partners. With both the banks now being shut down, it raises concern for the greater crypto industry on how they would be facilitating payments going further. At the time of writing, Bitcoin’s price was currently exchanging hands at $23,560 which represents a gain of 14.77% in the past 24 hours.
Also Read: Bitcoin Price Soars As US Bank Stocks Halt, Will BTC Break $25k?
The post Just-In: U.S. President Biden Claims Investors Of Affected Banks Will Not Be Bailed Out appeared first on CoinGape.
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