President Joseph Biden has promised to hold Silicon Valley Bank (SVB) and Signature Bank’s failures accountable while ensuring Americans that their deposits are safe. The NYDFS seized the crypto-friendly Signature Bank on March 12. The Federal Reserve also closed Signature Bank to protect the U.S. economy and boost banking confidence.
A $25 million fund to support banks with liquidity concerns was also announced. On Mar. 13, U.S. President Joe Biden told his 29.9 million Twitter followers that he’s glad the agencies “found a solution that protects workers, small businesses, taxpayers and our financial system.” The President stated that he was “firmly committed” to “totally accountable” anyone guilty for the debacle. He said he will “have more to say” in a Monday local time address.
Several US politicians have also praised federal regulator steps to prevent financial catastrophe contagion. According to a March 12 statement by the U.S. Senate Banking and Housing Committee, “Today’s actions will enable workers to receive their paychecks and for small businesses to survive, while providing depository institutions with more liquidity options to weather the storm.”
“As we work to better understand all of the factors that contributed to the events of the last several days and how to strengthen guardrails for the largest banks, we urge financial regulators to ensure the banking system remains stable, strong, and resilient and depositors’ money is safe,” the statement said.
Meanwhile, U.S. Securities Exchange Commission Chairman Gary Gensler has stepped up his agency’s pursuit of wrongdoers without identifying industries.
“In times of increasing volatility and uncertainty, we at the SEC are particularly focused on monitoring for market stability and identifying and punishing any type of misbehavior that can jeopardize investors, capital formation, or the markets more broadly,” the chairman said on March 12.
SVB has $3.3 billion of Circle’s $40 billion USDC reserves, therefore its closure temporarily devalued USDC to $0.88 on Mar. 11.Once the Federal Reserve announced that Signature Bank and SVB customer deposits would be made “whole,” USDC is virtually back at $1.
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