US President Joe Biden on March 17 expressed confidence in the weakening of the US banking crisis.
During a conversation with reporters, Biden was asked if he was sure that “the banking crisis had subsided.” The head of state answered in the affirmative.
On the same day, Joe Biden asked Congress to give his administration the right to severely punish the management of banks, because of the management of which financial institutions went bankrupt. He called for the competent authorities to be allowed to withdraw bonuses and proceeds from the sale of shares from the management of such banks in the run-up to the collapse, and then to completely ban them from working in the banking sector.
Earlier, on March 11, it became known about the bankruptcy of Silicon Valley Bank in the USA. The organization went bankrupt in less than two days. After the bank made an unsuccessful operation with securities, depositors began to withdraw funds sharply from their accounts.
After the sale of the British branch of the bankrupt Silicon Valley Bank, shares of American banks began to lose positions in the auction. Thus, Western Alliance securities fell by more than 44%, and First Republic Bank by almost 59%. Shares of banks PacWest, Zions and UMB Financial fell in price by 20.7-27.5%.
The next day, Axios reported that the administration of US President Joe Biden would soon face a crisis in the banking system. The publication notes that if the US government does not arrange a deal to save Silicon Valley Bank depositors before branches open on March 13, the Cabinet will face a catastrophic crisis.
At the same time, information appeared that the US authorities were not considering the possibility of buying out the bankrupt SVB. According to Treasury Secretary Janet Yellen, the current situation is different from the financial crisis of 2008, when the government bailed out many banks to protect the country’s economy.
In turn, Biden tried to convince American citizens that they can be confident in the security of the country’s banking system. He vowed to ask Congress and “banking regulators to tighten rules on banks and reduce the risk of this kind of bank failure happening again” and to protect jobs and small businesses in the country. According to the American leader, the situation around bankrupt banks will not affect taxpayers.
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