The US will do “whatever is needed” to shore up banks after a string of failures raised fears about financial stability, President Joe Biden said.
His comments came after the US guaranteed all deposits at Silicon Valley Bank and Signature Bank, which both collapsed last week.
The US is trying to stop people taking out funds from banks after SVB collapsed amid a rush of withdrawals.
Americans should “rest assured that our banking system is safe”, Mr Biden said.
People and businesses who have money deposited with SVB – the country’s 16th largest bank – would be able to access all their cash from Monday, he said.
Taxpayers will not bear any losses from the move, which extends protection beyond the $250,000 (£205,000) in deposits typically insured by the government. The cost will instead by funded by fees regulators charge to banks.
“Let me also assure you we will not stop at this. We’ll do whatever is needed,” Mr Biden said.
How did Silicon Valley Bank collapse?
SVB – which specialised in lending to technology companies – was shut down by regulators on Friday. It was the largest failure of a US bank since the financial crisis in 2008.
It came after SVB had scrambled to raise money to plug a loss from the sale of assets affected by higher interest rates. Word of the troubles led customers to race to withdraw funds, leading to a cash crisis.
Authorities on Sunday also took over Signature Bank of New York, which had many clients involved in crypto and was seen as the institution most vulnerable to a similar bank run after SVB.
Source: bbc.com
