Biden, the speech today after the collapse Svb: “Measures not paid by taxpayers”

The banking system is solid and the measures taken by the Federal Reserve and the Treasury Department “will not be paid by taxpayers”. But “we must strengthen the rules to prevent further collapses”. American President Joe Biden, before flying to California for the trilateral meeting with the leaders of the United Kingdom and Australia, sends a message to Americans after a weekend in which federal authorities and investors worked to find a solution to the collapse of the SVB and the closure – Sunday by New York regulators – of Signature Bank.

The depositors of the SVB and Signature Bank will already have access to their money from this morning and the operations of small and medium-sized enterprises will therefore be able to continue without interruptions, explained the de facto president, translating very clearly the actions that Yellen and Powell through a press release they launched on Sunday evening once SVB’s rapid sales faded.

Biden said taxpayers won’t lose a dollar and said management of companies brought under FDIC control “must be fired.”

The protective shield, on the other hand, will not be activated for investors, “they know the risks of investments, this is how capitalism works”, underlined the American president, highlighting that it is also necessary to identify those responsible for what happened. He did not cite SVB management or make precise references but he recalled that “no one is above the law”. Finally, he underlined the need to strengthen the system to prevent similar incidents from happening again in the future. It will be up to Congress to crack down on banking rules.

The SVB affair is also triggering a reflection on the need for the FED to raise interest rates again at its meeting on 22-23 March. According to 66% of economists quoted in a poll by CNBC, Powell could curb the hikes to ease tension in the banking system