US President Joe Biden attempted to calm the markets in a Monday morning speech, where he insisted that “Americans can have confidence that the banking system is safe,” and that US bank regulators and Treasury Secretary Janet Yellen took “immediate” action to stop contagion among small and medium-sized banks following the Friday collapse of Silicon Valley Bank.
Biden made clear that investors in the failed banks will not be protected. When asked by reporters if there would be a ripple effect, and whether he could explain how and why this happened, Biden ignored the questions.
With bank stocks – most notably small/medium-sized banks – deeply in the red, it appears at first glance that The Fed/TSY/FDIC’s cunning plan to implicitly backstop every deposit is not stemming the contagion’s tide. White House statements claimed Biden had directed US Treasury Secretary Janet Yellen and National Economic Council Director to work with banking regulators to address problems at Silicon Valley Bank and Signature Bank. He also assured action against “those responsible for the mess”.