OTTAWA: President Joe Biden downplayed Wall Street anxiety and lingering concerns of broader financial turbulence by saying he was certain American regional banks were in good health and didn’t foresee any major catastrophes on the horizon.
We did pretty darn good, in my opinion. People’s funds are safe, stated Biden alongside Justin Trudeau at a press conference held on Friday in Ottawa. “I don’t see anything that’s on the horizon that’s about to erupt,” the speaker said. “I think it’s going to take a little while for things to just quiet down.”
When asked about the fear in the financial markets, Biden made the joke, “You ever know a Wall Street not in consternation?”
In an effort to project stability and prevent spookiness in the markets, Biden is trying to shift his focus away from the banking problem. This was his first mention of it in a week.
According to Biden, if the financial crisis extended, the government would be able to safeguard deposits.
He said, referring to the Federal Deposit Insurance Corp., “What we would do is, if we found that it’s more instability than appears, we’d be in a position at the FDIC utilise the power it has to guarantee those loans beyond $250,000, like they did earlier.”
Pressure has been put on US regulators to provide more information regarding guaranteeing uninsured deposits.
Senator Elizabeth Warren has urged regulators to increase the guarantees on accounts that are worth more than the existing $250,000 cap. Regulators, according to Treasury Secretary Janet Yellen, are not seeking to offer “blanket” deposit insurance without consulting with lawmakers.
This week, Biden expressed satisfaction that the worst of the upheaval affecting the American banking system had subsided. Additionally, he has publicly referred the matter to Congress, urging lawmakers to enact stricter bank laws and sanctions against executives of failing banks, including expanded authority to recoup bonuses.
Although having already received a $30 billion bailout, regulators are still trying to stabilise the industry in the wake of the failure of Silicon Valley Bank and Signature Bank as well as concerns over the condition of First Republic Bank, another regional lender.
Leading US banking regulators came together on Friday after Yellen called a Financial Stability Oversight Council meeting that had been previously unplanned.
Problems at Credit Suisse Group AG made the banking crisis worse, which prompted the Swiss government to mediate a deal for its acquisition by longtime rival UBS Group AG.
On Friday, markets experienced further volatility as attention was drawn to Deutsche Bank, whose shares had their biggest decline in three years.
