Joe Biden will deliver a speech on the banking crisis at 8 a.m. EDT Monday from the Roosevelt Room of the White House in a bid to calm U.S. markets ahead of the open.
The White House announcement came late Sunday night, several hours after Biden made a statement about the announcement of a safety net for depositors in two closed banks (Silicon Valley Bank of California and Signature Bank of New York) was announced. In the statement, Biden said he would speak about the arrangement on Monday.
“The President Delivers Remarks on Maintaining a Resilient Banking System and Protecting Our Historic Economic Recovery”
Monday at 8 a.m. EST – President Biden will deliver remarks on maintaining a resilient banking system and protecting our historic economic recovery. pic.twitter.com/mh9BCsRUFz
—Anthony DeRosa (@Anthony) March 13, 2023
Biden’s statement published by the White House Sunday night:
Statement by President Joe Biden on Actions to Build Confidence in the Banking System
Over the weekend, and under my direction, the Secretary of the Treasury and my director of the National Economic Council worked diligently with banking regulators to resolve the problems at Silicon Valley Bank and Signature Bank. I’m glad they’ve come to a quick fix that protects American workers and small businesses and keeps our financial system safe. The solution also ensures that taxpayers’ money is not put at risk.
The American people and American businesses can be sure that their bank deposits will be there when they need them.
I am firmly determined to hold those responsible for this mess fully accountable and to continue our efforts to strengthen the supervision and regulation of the big banks so that we do not find ourselves in this situation again.
Tomorrow morning, I will deliver a keynote address on how we will maintain a resilient banking system to protect our historic economic recovery.
A version of the statement was also posted on Twitter:
My request, @SecYellen and my director of the National Economic Council worked with banking regulators to solve the problems of Silicon Valley Bank and Signature Bank.
I’m glad they found a solution that protects workers, small businesses, taxpayers and our financial system. https://t.co/CxcdvLVP6l
— President Biden (@POTUS) March 13, 2023
I am firmly determined to hold those responsible for this mess fully accountable and to continue our efforts to strengthen the supervision and regulation of the big banks so that we do not find ourselves in this situation again.
I will have more to say on that tomorrow morning.
— President Biden (@POTUS) March 13, 2023
Not to be outdone, Kamala Harris or her team divulged to a friendly LA Times reporter that she also helped.
“Scooplet: Throughout the weekend, @VP has been closely monitoring the situation with Silicon Valley Bank. She is in contact with the Treasury, administration leadership, Silicon Valley leadership, and congressional leadership from California…the focus of these discussions are depositors with uninsured balances (many of whom are small businesses trying to manage payroll).
the focus of these talks are depositors with uninsured balances (many of whom are small businesses trying to manage payroll).
—Courtney Subramanian (@cmsub) March 12, 2023
California Governor Gavin Newsom made no mention of Harris in his statement praising the Biden administration Sunday evening outing:
Governor Newsom issues statement on Biden administration action regarding Silicon Valley Bank
Posted: March 12, 2023SACRAMENTO – Governor Gavin Newsom today issued the following statement in response to the Biden administration’s announcement allowing the Federal Deposit Insurance Corporation to finalize its resolution of Silicon Valley Bank in a manner that fully protects all depositors.
“The Biden administration acted quickly and decisively to protect the American economy and bolster public confidence in our banking system. Their actions over the weekend calmed nerves and had profoundly positive impacts on California – about our small businesses that can now make payroll, the workers who will get their paychecks, about the affordable housing projects that can keep building, and about the nonprofits that can keep their doors open tomorrow. California is a pillar of the American economy, and federal leaders have done the right thing, ensuring that our innovation economy can continue to grow and move forward.
Earlier Sunday, Axios warned, ‘Biden on the brink of banking crisis’ (extract)
President Biden risks a catastrophic banking crisis unless the US government can orchestrate a deal to rescue Silicon Valley Bank depositors before branches open tomorrow.
Why it matters: Bank runs kill banks, no matter how well they manage risk. (For a quick primer, see the famous financial crisis documentary Mary Poppins.)
How it works: Banks don’t keep deposits in a vault — they lend them to businesses and individuals. So if depositors ask for all their money at once, as they did to the SVB, the bank risks going bankrupt.
Corporate America just got a stark reminder that none of their deposits are insured above $250,000 by the Federal Deposit Insurance Corporation (FDIC).
If SVB depositors are not restored by Monday morning, hundreds of billions of dollars in business deposits will likely flow out of regional banks. Most would go to a handful of so-called systemically important banks – if they’re too big to fail, they won’t. Some might go into other ultra-safe havens like Treasuries.
State of Play: Every non-huge U.S. bank needs to consider whether they will be able to retain their corporate clients.
A Biden gaffe could cost stock market jitters billions on Monday morning. Futures contracts are on the rise overnight to date.