On Monday, U.S. Senator Katie Britt expressed her concerns that Republicans are not being kept informed about the federal government’s response to the recent failures of Silicon Valley Bank and Signature Bank.
“My office and I have been in contact with federal financial regulators since Friday, and we continue to closely monitor the situation,” Britt stated in a press release. “The public deserves full transparency and accountability without regard to partisanship, and it is unacceptable that this Administration excluded Senate Republicans, including those on the Senate Banking Committee, from Sunday night’s bicameral Member briefing. Right now, we have more questions than answers. Why did regulators not see this coming? Did Silicon Valley’s focus on ESG distract from their fiduciary responsibilities, in turn contributing to its collapse? How much extra money will local community banks in rural Alabama have to fork up to fund the Administration’s plans? Unfortunately, we did not get any clarity on these pressing items on today’s Member briefing call, which the Federal Reserve did not make time to attend. Ultimately, American taxpayers should not have to foot the bill for bank executives’ mismanagement and regulators’ failure. I will continue to support the strength of our financial system, which is crucial to hardworking families, small businesses, retirees, and communities in every corner of our nation.”
Federal regulators said that Silicon Valley Bank customers would be able to access all of their funds starting on Monday.
“Depositors will have access to all of their money starting Monday, March 13,” the U.S. Department of the Treasury, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) said in a joint statement. “No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
They added that the depositors of Signature Bank in New York “will be made whole at no cost to the taxpayer.” The NY bank was closed on Sunday by state financial regulators.
The statement added that the Federal Reserve will make additional funding available to eligible institutions “to help assure banks have the ability to meet the needs of all their depositors.”
The regulators claimed that the broader banking system “remains resilient and on a solid foundation, largely due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry.”
President Joe Biden urged everyone to remain calm in comments delivered on Monday.
“Today, thanks to the quick action of my administration over the past few days, Americans can have confidence that the banking system is safe,” Biden said. “Your deposits will be there when you need them. Small businesses across the country that had deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills. And their hardworking employees can breathe easier as well.”
“Last week, when we learned of the problems of the banks and the impact they could have on jobs, some small businesses, and the banking system overall, I instructed my team to act quickly to protect these interests,” Biden explained. “They have done that. They have done that. On Friday, the government regulator in charge, the FDIC, took control of Silicon Valley Bank’s assets. And over the weekend, it took control of Signature Bank’s assets. Treasury Secretary Yellen and a team of banking regulators have taken action — immediate action.”
“All customers who had deposits in these banks can rest assured — I want to — rest assured they’ll be protected and they’ll have access to their money as of today,” Biden continued. “That includes small businesses across the country that banked there and need to make payroll, pay their bills, and stay open for business. No losses will be — and I want — this is an important point — no losses will be borne by the taxpayers. Let me repeat that: No losses will be borne by the taxpayers. Instead, the money will come from the fees that banks pay into the Deposit Insurance Fund.”
“Because of the actions of that — because of the actions that our regulators have already taken, every American should feel confident that their deposits will be there if and when they need them,” Biden said. “Second, the management of these banks will be fired. If the bank is taken over by FDIC, the people running the bank should not work there anymore. Third, investors in the banks will not be protected. They knowingly took a risk, and when the risk didn’t pay off, investors lose their money. That’s how capitalism works. And fourth, there are important questions of how these banks got into these circumstances in the first place. We must get the full accounting of what happened and why those responsible can be held accountable. In my administration, no one, in my view — no one is above the law.”
“Finally, we must reduce the risks of this happening again,” the President added. “During the Obama-Biden administration, we put in place tough requirements on banks like Silicon Valley Bank and Signature Bank, including the Dodd-Frank Law, to make sure the crisis we saw in 2008 would not happen again. Unfortunately, the last administration rolled back some of these requirements. I’m going to ask Congress and the banking regulators to strengthen the rules for banks to make it less likely that this kind of bank failure will happen again and to protect American jobs and small businesses.”
“The bottom line is this: Americans can rest assured that our banking system is safe,” said Biden. “Your deposits are safe.”
Katie Britt is a member of the Senate Committee on Banking, Housing, and Urban Affairs and serves on the Senate Banking subcommittee on Financial Institutions and Consumer Protection.
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