Biden vows to hold bank closures accountable | banking

US President Joe Biden guaranteed that the leaders of the two banks closed due to financial difficulties will be held accountable and promised to maintain “a resilient banking system”.

“I am firmly committed to holding those responsible for this situation to account,” Biden said, referring to the collapse of Silicon Valley Bank (SVB) and the closure of Signature Bank.

In a statement released on Sunday by the White House, the head of state promised to visit the country on Monday to reassure the population about the banking system in the United States.

“I’m going to talk about how we’re going to maintain a resilient banking system to protect our historic economic recovery,” Biden said.

The President assured that “the American people and American companies can be sure that their bank deposits will be there when they need it”.

Hours earlier, US regulators had announced a plan to protect the deposits of SVB customers.

The Treasury Department, the Federal Reserve (Fed) and the Federal Deposit Insurance Corporation (FDIC) said in a joint statement that customers will have access to all money deposited in the SVB.

With this plan, the three entities advanced, US taxpayers “will not assume the losses” of the bank and deposits will be protected to “facilitate access to credit by families and companies”.

Regulators also announced the closure of Signature Bank, headquartered in New York, and promised that the same plan will be applied to reimburse customers for all deposited money, the EFE agency said.

Signature Bank, which provides financial services mainly to law firms and the crypto ecosystem, according to specialized information bodies, had assets of 110.36 billion dollars (102.86 billion euros) and deposits of 88.59 billion euros. billion dollars (82.57 billion euros) at the end of 2022.

The New York Department of Financial Services is in contact and coordinated with the FDIC for its closure “in light of market developments” and is “following trends” and collaborating with authorities to “protect customers” and “preserve the stability of the global financial system,” he said in a statement.

California-based SVB announced on Wednesday, March 8, that it was seeking a capital increase to overcome financial difficulties.

The announcement prompted many customers to withdraw funds and regulators shut down the bank on Friday for lack of liquidity. Subsequently, the company’s share price collapsed, which in turn affected the banking sector in general, both in the United States and in other countries. The bank closed on Friday, March 11th.

The US Secretary of the Treasury, Janet Yellen, had on Sunday refused a federal bailout of the SVB, but assured that the Government was working to support the institution’s depositors.

The FDIC guarantees deposits of up to $250,000 (233,000 euros), but many companies and private customers of the bank, known for its relationships with startups technology and venture capital, had more than that amount deposited.

This was the second-largest bank failure in US history, after the collapse of Washington Mutual in 2008.

HSBC buys British SVB for one pound

HSBC, Europe’s largest bank, announced the purchase of the British subsidiary of SVB, for the symbolic sum of one pound (1.13 euros).

In a statement sent today to the Hong Kong Stock Exchange, where it is listed, HSBC estimates the equity of the British subsidiary at around 1.4 billion pounds (1.58 billion euros).

“This acquisition makes strategic sense for our UK business,” HSBC Chief Executive Noel Quinn said in a statement.

The transaction “strengthens our brand as a commercial bank and increases our ability to support innovative and fast-growing companies, including in the technology and life sciences sectors, both in the UK and internationally”, he explained.

HSBC is involved in a plan to cut costs and cut thousands of jobs in Europe and the United States in order to strengthen its presence in Asia, its main market.

The British Treasury Department revealed that the sale of SVB UK was “facilitated” by the British government and the Bank of England, but without the involvement of public money.

“SVB UK customers will be able to access their deposits and banking services normally from today”, underlined the department, in a statement.

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