After collapse of the SVB
Biden wants to tighten banking rules
03/13/2023, 4:05 p.m
The bankruptcy of the Silicon Valley Bank triggers turmoil on the international stock markets. Memories of the financial crisis around fifteen years ago are awakened. US President Joe Biden assures that deposits in the system are safe – but still wants to tighten the regulatory reins.
According to US President Joe Biden, the rules for US banks are to be tightened after the collapse of California’s Silicon Valley Bank. He wants to ask Congress and regulators to do so, Biden said in Washington. It must be avoided that something like this happens again. The US government reacted quickly. Therefore, Americans should have confidence that the US banking system is secure.
The SVB, which specializes in financing young technology companies, got into trouble not least because of the interest rate turnaround. Customers withdrew billions of dollars. The California regulator took action on Friday and closed the bank.
Biden also assured the stability of the US banking system. People “can have confidence that the banking system is safe,” Biden said. “Your insoles will be there when you need them,” he continued. At the same time, Biden assured that the country’s taxpayers would not have to answer for losses related to the bank’s bankruptcy. He called on Congress to regulate the sector more. The management of the bank will also be “fired”.
The US authorities closed the Silicon Valley Bank on Friday. The financial institution had run into massive difficulties as a result of billions in losses from the sale of securities. It was primarily relevant for the financing of startups in the USA and had focused on the technology sector. In Germany, the BaFin closed the branch of the Silicon Valley Bank: It imposed a ban on sales and payments and ordered a moratorium on customer traffic.