Biden says banking crisis has calmed down

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U.S. President Biden delivers remarks on the banking crisis, in Washington
U.S. President Joe Biden delivers remarks on the banking crisis after the collapse of Silicon Valley Bank (SVB) and Signature Bank, in the Roosevelt Room at the White House in Washington, D.C., U.S. March 13, 2023. REUTERS/Evelyn Hockstein

WASHINGTON, March 22 (Reuters) - U.S. President Joe Biden said on Friday the banking crisis has calmed down after the recent collapse of Silicon Valley Bank (SVB) (SIVB.O) and Signature Bank (SBNY.O).

Biden has sought to reassure investors and depositors that the global banking system is safe as financial stocks have lost billions of dollars in value since the collapse of the two mid-size U.S. lenders over the past week. Biden, earlier this week, promised Americans that their deposits are safe.

"Yes," Biden told reporters at the White House on Friday when asked if the banking crisis had calmed down.

Californian regulators shuttered Silicon Valley Bank last Friday and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. It was the largest collapse since Washington Mutual failed during the financial crisis of 2008.

On Friday, the bank's parent, SVB Financial Group, said it had filed for reorganization under Chapter 11 bankruptcy protection.

Large U.S. banks injected $30 billion in deposits into First Republic Bank a day earlier, swooping in to rescue the mid-sized lender caught up in the crisis triggered by the collapse of SVB and Signature Bank.

The deal was put together by power brokers including U.S. Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell and JPMorgan Chase CEO Jamie Dimon.

Earlier on Friday, Biden had called on Congress to give regulators greater power over the banking sector, including leveraging higher fines for managers, clawing back executives' compensation and barring officials from failed banks.

Specifically, Biden is asking Congress to give the FDIC greater authority to claw back compensation, "including gains from stock sales – from executives at failed banks like Silicon Valley Bank and Signature Bank," the White House said on Friday.

Democrats who have been calling for tougher banking regulation were quick to hail Biden's statement, but it is unclear whether it has bipartisan support in Congress.

Silicon Valley Bank CEO Greg Becker sold $3.6 million worth of shares in late February, about two weeks before the bank entered FDIC receivership, Bloomberg and CNBC reported.

(Reporting by Jeff Mason, writing by Kanishka Singh, editing by Sandra Maler and Lincoln Feast.)

Reporting by Kanishka Singh in Washington

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Jeff Mason is a White House Correspondent for Reuters. He has covered the presidencies of Barack Obama, Donald Trump and Joe Biden and the presidential campaigns of Biden, Trump, Obama, Hillary Clinton and John McCain. He served as president of the White House Correspondents’ Association in 2016-2017, leading the press corps in advocating for press freedom in the early days of the Trump administration. His and the WHCA's work was recognized with Deutsche Welle's "Freedom of Speech Award." Jeff has asked pointed questions of domestic and foreign leaders, including Russian President Vladimir Putin and North Korea's Kim Jong Un. He is a winner of the WHCA's “Excellence in Presidential News Coverage Under Deadline Pressure" award and co-winner of the Association for Business Journalists' "Breaking News" award. Jeff began his career in Frankfurt, Germany as a business reporter before being posted to Brussels, Belgium, where he covered the European Union. Jeff appears regularly on television and radio and teaches political journalism at Georgetown University. He is a graduate of Northwestern University's Medill School of Journalism and a former Fulbright scholar.

Thomson Reuters

Kanishka Singh is a breaking news reporter for Reuters in Washington DC, who primarily covers US politics and national affairs in his current role. His past breaking news coverage has spanned across a range of topics like the Black Lives Matter movement; the US elections; the 2021 Capitol riots and their follow up probes; the Brexit deal; US-China trade tensions; the NATO withdrawal from Afghanistan; the COVID-19 pandemic; and a 2019 Supreme Court verdict on a religious dispute site in his native India.

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