Biden says taxpayers won't bail out Silicon Valley Bank and the people responsible for its collapse will be held accountable: 'No one is above the law'
Evelyn Hockstein/Reuters.
- Taxpayer funds will not bail out Silicon Valley Bank customers, President Joe Biden said Monday.
- Investors, on the other hand, face losses — "That's how capitalism works," he said.
- The bank’s management will be fired, Biden said, signaling calls for accountability.
When customers of collapsed Silicon Valley Bank get their deposits back, it won't be taxpayers who pick up the tab, President Joe Biden said in an address Monday morning.
Instead, their funds would be restored through "fees that banks pay into the deposit insurance fund," Biden said, delivering a message that sought to rebuild confidence in the US banking system amid fears of wider collateral damage from SVB's crash on Friday.
Biden also indicated what he said were measures geared toward accountability for SVB's collapse, saying that management would be removed in such cases, and that the investors should bear the risk of losses.
"If the bank is taken over by FDIC, the people running the bank should not work there anymore," he said.
"Investors in the banks will not be protected — they knowingly took a risk, and when the risk didn't pay off, investors lose their money," he added. "That's how capitalism works."
Biden also called for a "full accounting" of the factors that led to SVB's collapse, saying, "in my administration, no one is above the law."
A representative for Silicon Valley Bank did not immediately return Insider's emailed request for comment Monday morning.
In the chaotic aftermath of SVB's takeover by the Federal Deposit Insurance Corporation, New York regulators separately closed down Signature Bank over the weekend, setting off more alarms over the health of the banking system.
SVB's abrupt crash, which unfolded within days, had sent startups who had relied on their sector's trusted institution scrambling to figure out how to pay employees.
On Sunday, Treasury Secretary Janet Yellen and other federal officials said they moved to protect depositors of both, SVB and Signature Bank, saying that banks would foot the bill.