President Biden has been speaking in an attempt to reassure people and markets that the US financial system remains strong.
In a speech on March 13 (Vietnam time), at the White House, Mr. Biden made an effort to reassure people and markets that the US financial system remained strong.
"Thanks to the swift action of the US government over the past few days, Americans can be confident that the banking system remains safe.
People's deposits are still there if needed," Biden said in his speech. on March 13, a few days after the collapse of Silicon Valley Bank (SVB) and Signature Bank.
These are the two largest-scale failures and the third in the history of the US banking industry, raising fears that the spillover effects will create a full-blown crisis.
The US President affirmed that all depositors at these two banks "can rest assured that they are protected and have access to their money starting today (March 13)".
He will also ask Congress to strengthen banking regulation, holding those involved in the two crashes accountable. "Investors in these banks won't be protected. They know they have to take risks. And when the risk happens, they lose money," he said.
US officials have announced a series of measures since March 12 to revive confidence after two bank closures. Accordingly, all deposits at SVB and Signature Bank will be secured, including those that are not insured under FDIC regulations (greater than USD 250,000).
The Fed also announced a program to lend to commercial banks, with more lenient terms than usual. They expect the program to be large enough to handle uninsured deposits in the US banking system. However, these efforts have not been able to stop the decline of banking stocks in the US. First Republic stock is now down 65%. PacWest Bancorp is down 42%. Western Alliance Bancorp is down more than 70%. Wells Fargo and Citi Group both fell, posting their worst sessions since January 2021. Bank of America also lost nearly 8% - the strongest since mid-2020. In the gold market, the price of gold is now up nearly 40 USD, to 1,906 USD an ounce. Gold has rallied strongly in the last few sessions due to concerns about the spread of the SVB crash.