President Joe Biden reassured Americans about the stability of the financial sector on Monday morning following the recent collapse of SVB Financial Group SIVB, Signature Bank SBNY and Silvergate Capital Corp SI.
Deposits Protected: In his address, Biden emphasized that all bank customers will have access to their funds.
"All customers who had deposits in these banks can rest assured they'll be protected, and they'll have access to their money as of today, Biden said. "No losses will be borne by the taxpayers. Instead, the money will come out of the fees the banks pay into the deposit insurance fund."
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But while bank customers will be protected, Biden said bank investors will not.
"They knowingly took a risk, and when the risk didn't pay off, investors lose their money. That's how capitalism works," Biden said.
In addition, he noted the management teams at the collapsed banks will be fired.
Top Priorities: Biden said his team's top priorities are to protect the deposits of American workers and small businesses without putting taxpayers at risk.
"Americans can rest assured that the banking system is safe, their deposits are safe, …. we will not stop at this, we will do whatever is needed,” Biden said.
Benzinga's Take: Biden did his best to ease concerns of spooked investors and bank customers and assure Americans that there is no problem with the banking industry. However, the SPDR S&P 500 ETF Trust SPY traded lower by 1% on Monday morning as investors remain concerned of additional contagion in the financial sector.
Next: Biden's Proposed Tax Hikes On Corporations And The Wealthy: What Investors Need To Know
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