Joe Biden will give remarks on the banking crisis at 8 a.m. EDT Monday from the Roosevelt Room at the White House in an effort to calm U.S. markets before the open.
The announcement by the White House came late Sunday night, several hours after a statement by Biden on the announcement of a backstop for depositors at two closed banks (California’s Silicon Valley Bank and New York’s Signature Bank) was announced. In the statement Biden had said he would speak Monday about the arrangement.
“The President delivers remarks on maintaining a resilient banking system and protecting our historic economic recovery”
8am EST on Monday – 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 released by the White House Sunday evening:
Statement from President Joe Biden on Actions to Strengthen Confidence in the Banking System
Over the weekend, and at my direction, the Treasury Secretary and my National Economic Council Director worked diligently with the banking regulators to address problems at Silicon Valley Bank and Signature Bank. I am pleased that they reached a prompt solution that protects American workers and small businesses, and keeps our financial system safe. The solution also ensures that taxpayer dollars are not put at risk.
The American people and American businesses can have confidence that their bank deposits will be there when they need them.
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.
Tomorrow morning, I will deliver remarks on how we will maintain a resilient banking system to protect our historic economic recovery.
A version of the statement was also posted to Twitter:
At my direction, @SecYellen and my National Economic Council Director worked with banking regulators to address problems at Silicon Valley Bank and Signature Bank.
I’m pleased they reached a solution that protects workers, small businesses, taxpayers, and our financial system. https://t.co/CxcdvLVP6l
— President Biden (@POTUS) March 13, 2023
I’m 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.
I’ll have more to say on this tomorrow morning.
— President Biden (@POTUS) March 13, 2023
Not to be left out, Kamala Harris or her staff leaked to a friendly L.A. Times reporter that she helped too.
“Scooplet: Throughout the weekend, @VP has been closely monitoring the situation w/Silicon Valley Bank. She’s in contact w/Treasury, administration leadership, Silicon Valley executives & California congressional leadership…the focus of those talks is depositors with uninsured balances (many of whom are small businesses trying to run payroll).”
the focus of those talks is depositors with uninsured balances (many of whom are small businesses trying to run payroll).
— Courtney Subramanian (@cmsub) March 12, 2023
California Governor Gavin Newsom made no mention of Harris in his statement praising the Biden administration released Sunday evening:
Governor Newsom Issues Statement on Biden Administration’s Action on Silicon Valley BankPublished: Mar 12, 2023
SACRAMENTO — Governor Gavin Newsom today issued the following statement in response to the Biden Administration’s announcement enabling the Federal Deposit Insurance Corporation to complete its resolution of Silicon Valley Bank in a manner that fully protects all depositors.
“The Biden Administration has acted swiftly and decisively to protect the American economy and strengthen public confidence in our banking system. Their actions this weekend have calmed nerves, and had profoundly positive impacts on California — on our small businesses that can now make payroll, workers who will get their paychecks, on affordable housing projects that can continue construction, and on non-profits that can keep their doors open tomorrow. California is a pillar of the American economy, and federal leaders did the right thing, ensuring our innovation economy can continue to grow and move forward.”
Earlier Sunday, Axios warned, “Biden on brink of banking crisis” (excerpt)
President Biden is in danger of a catastrophic banking crisis, unless the U.S. 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 good or bad their risk management. (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 out to businesses and individuals. So if depositors ask for all their money back at once, as they did at SVB, the bank is likely to fail.
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’s depositors aren’t made whole by Monday morning, hundreds of billions of dollars of corporate deposits are likely to flow out of regional banks. Most would flow into a handful of so-called systemically important banks — if they’re too big to fail, they won’t fail. Some might go into other ultra-safe havens like Treasury bills.
State of play: Every non-enormous bank in America is left to worry about whether it’s going to be able to hold onto its corporate customers.
One Biden gaffe could cost billions in stock market jitters Monday morning. Futures are up overnight as of this writing.