US President Joe Biden has sought to assure the American people that the country’s banking system is intact. The assurances follow the collapse of two major banks.
Biden made assurances on Monday during a news conference at the White House that the banking system is safe following the closure of Silicon Valley Bank by the country’s regulators on Friday after it experienced a traditional bank run when depositors sought to withdraw all their funds at once.
This marked the second-largest failure of a bank in the country’s history since the 2008 collapse of Washington Mutual. Along with Silicon Valley Bank, the New York-based Signature Bank also experienced a collapse.
“All customers who had deposits in these banks can rest assured – rest assured – they’ll be protected and they’ll have access to their money as of today,” Biden told reporters.
“Americans can have confidence that the banking system is safe. Your deposits will be there when you need them,” said Biden, adding that he will look to hold those responsible accountable and call for better oversight and regulation of larger banks while promising that “no losses would be borne by the taxpayers.”
In an effort to restore confidence, the Federal Reserve, the Treasury Department, and the Federal Deposit Insurance Corporation on Sunday said that all clients of SVB would be protected and have access to their money.
Biden’s economic team has been coordinating with regulators on the necessary steps that include guaranteeing deposits in the two banks and establishing a new facility that would provide banks with access to emergency funds to make it easier for both banks to borrow from the Federal Reserve in case of emergencies.
The US leader is also requesting defense spending of $886 billion. $842 billion would be for the Pentagon and $44 billion for defense-related programs at the Federal Bureau of Investigation, Energy Department, and other government agencies. This would make the budget for 2024 $28 billion more than the $858 billion requested last year.
Congress has signaled that it plans to increase defense spending at Biden’s request during the months-long process. The Senate and House usually pass legislation on policy and spending levels at the Pentagon later in the year. Both the Biden administration and Congress are looking at a potential prolonged war in Ukraine and potential future military conflicts with Russia and China.