U.S. President Joe Biden is due to speak Monday about the banking system after the government acted to try to contain a potential crisis from the failure of two major banks.
“The American people and American businesses can have confidence that their bank deposits will be there when they need them,” Biden said in a statement late Sunday. “I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.”
The U.S. Treasury Department said in a statement Sunday that depositors at the California-based Silicon Valley Bank and the New York-based Signature Bank will have access to all of their money on Monday.
The regulators also said no losses associated with the resolution of Silicon Valley Bank and Signature Bank will be borne by the taxpayer.
The statement followed a meeting of officials from top financial regulators, and said the Federal Reserve was also giving other banks access to an emergency lending program to provide additional stability to the wider banking system.
The actions were prompted by the failure of Silicon Valley Bank, which regulators seized on Friday after concerns about the bank’s financial health led to a large number of depositors withdrawing their money at the same time.
With about $200 billion in assets, Silicon Valley Bank’s failure was the second-largest in U.S. history. The bank was heavily involved in financing for venture capital firms, especially in the tech sector.
Signature Bank also had a large portion of clients in the tech sector, including cryptocurrency. Its failure, with more than $100 billion in assets, was the third-largest in the country’s history.
Both banks were affected by a rise in interest rates, which negatively affected the market values of significant portions of their assets such as bonds and mortgage-backed securities.
Some information for this story came from The Associated Press, Agence France-Presse and Reuters.