US President Joe Biden said Sunday that at his direction US Treasury Secretary Janet Yellen and his top economic adviser Lael Brainard worked with financial regulators to ensure households and businesses affected by the Silicon Valley Bank and Signature Bank failures could access their deposits, and he promised to hold those responsible accountable.
“I am pleased that they reached a prompt solution that protects American workers and small businesses, and keeps our financial system safe. The solution also ensures that taxpayer dollars are not put at risk,” Biden said in the statement.
“I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again,” he added.
Biden plans to make remarks Monday on maintaining a “resilient banking system.”
The administration decided to move forward with dramatic emergency actions Sunday to extend a federal backstop to all of Silicon Valley Bank’s deposits in order to ensure access to all of those funds on Monday, according to a senior Treasury official.
The emergency action was paired with the announcement of a new Federal Reserve lending facility and put together over a weekend of furious behind-the-scenes efforts inside the US government to address the acute concern over the fate of the small businesses and individuals at risk of being unable to access their funds.
Earlier, the FDIC said it would pay customers their insured deposits on Monday, which only covers up to $250,000. But the Treasury official noted that “things moved very quickly” over the weekend and that the decision was made to “move early” and trigger the systemic risk exception – a designation that provides more leeway to immediately advance funds to those holding deposits above the current $250,000 threshold covered by FDIC.
Yellen on Sunday instructed the Federal Deposit Insurance Corporation to guarantee SVB customers will have access to all of their money starting Monday – an attempt to ensure public confidence in America’s banking system, Yellen, Federal Reserve Chair Jerome Powell and FDIC Chairman Martin J. Gruenberg said in a joint statement.
Yellen said earlier Sunday the government wouldn’t bail out the bank, with a number of lawmakers speaking out against such an idea.
“Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out, and we’re certainly not looking,” Yellen told CBS News when asked if there will be a bailout. “And the reforms that have been put in place means that we’re not going to do that again.”
Yellen said she’d been hearing from depositors all weekend, many of whom are “small businesses” and employ thousands of people. “I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation,” the Treasury secretary said, declining to provide further details.
CNN’s David Goldman, Andrew Millman, Aileen Graef, Allison Morrow, Matt Egan, Manu Raju, Aaron Pellish and Jack Forrest contributed to this report.