Biden ensures that clients of the two closed banks in the United States receive the amounts deposited
- The closure of two banks in three days in the United States puts the international financial market on alert
The White House raced against the clock. In the speech, which lasted less than five minutes, Joe Biden tried to calm the mood:
Americans can be confident that the banking system is safe. Your deposits will be there when you need them.”
The president promised a thorough investigation and punishment of those responsible:
Bank officials will be fired. In my government, no one is above the law.”
The White House spent the weekend calling banks, regulators and Congress. now, Joe Biden is pressing lawmakers and regulators to tighten rules on banks and prevent a collapse of the financial system.
The SVB Executive Director was one of the main supporters of the project – He justified that his bank has a low level of risk.
Mark Williams, professor of finance at Boston University, explains the current crisis:
“In 2008, the banks gave bad loans, they didn’t have enough capital. Now, the banks took deposits and put them into bonds with lower interest rates, and when interest rates started to rise, the values fell and the real value of the currency fell. The company was depreciated. It was a bank run. Because investors were worried that if they didn’t withdraw their money, they would lose everything. It was a loss of confidence.”
“Now the tough questions arise: What is the maximum limit for saving banks? Do we need reforms in the regulation of the financial system?”
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