Biden Admin Scrambling To Prevent Financial Contagion
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The policies of the Biden administration have been a complete disaster.
Since Biden took office Americans have had to suffer through high gas prices and inflation.
The economy is not in good shape.
Silicon Valley Bank was taken over by the federal government last week – this was the biggest bank collapse since 2008.
The Biden administration is now scrambling to try and prevent this from spreading.
The Biden administration’s scramble to prevent financial contagion from the crash of Silicon Valley Bank is both an attempt to shield a resilient but still-vulnerable economy and to prevent grave political fallout.
The Treasury Department and federal regulators insisted there was no systemic risk to the banking system as a whole that could cause a repeat of the cataclysmic 2008 meltdown as they raced against the opening of Asian markets with measures to head off a run on small or regional US banks.
They unrolled emergency measures Sunday evening that will guarantee deposits of SVB’s customers. Regulators also closed down Signature Bank, another institution that was threatening to collapse, and ensured its customers would get a similar deal. US taxpayers will not finance either move, officials said.
The swift action may temper immediate stress in the financial markets. But it is too early to say whether the government will be forced into more sweeping action amid rising concerns about the health of the finance sector. The suddenness of the crisis is exacerbating anxiety since SVB failed, apparently out of nowhere, in 48 hours. Assurances by the White House and Treasury Secretary Janet Yellen that the broader banking system is sound set up a new test of economic credibility for an administration scarred by its handling of high inflation.
The Biden administration said there will be no bailout for the bank.
Treasury Secretary Janet Yellen announced Sunday that the federal government wouldn’t bail out the now-collapsed Silicon Valley Bank (SVB) but said it will work to aid depositors who are worried about their money.
During a Sunday interview with CBS News’ “Face the Nation,” Yellen did not provide many concrete details about what her agency or what the Federal Deposit Insurance Corporation might do to protect depositors’ cash. But the Treasury secretary, formerly an Obama-era Federal Reserve chair, emphasized that SVB’s situation was different than the financial crisis that erupted in 2008, which led to widespread bailouts of financial companies in what government officials at the time said was designed to protect the industry and larger U.S. economy.
The FDIC only insures deposits of up to $250,000 per account, analysts have said that a number of firms and wealthy investors had far more than the insured amount tied up in SVB. There have been concerns that workers at some tech companies and startups will not see their paychecks now.
“Well let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out, and we’re certainly not looking” to bail out SVB, Yellen said Sunday in response to a question about a possible bailout of the bank. “And the reforms that have been put in place means that we’re not going to do that again,” she added. “But we are concerned about depositors and are focused on trying to meet their needs.”
The Biden administration is incompetent.
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