Wednesday, June 7, 2023
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Biden says further use of federal deposit insurance if banks fail

By Andrea Shalal

OTTAWA (Reuters) – President Joe Biden said on Friday that federal deposit insurance can be used for more than $250 of deposits, expressed confidence that mid-sized U.S. banks could withstand pressure in the sector if other U.S. banks fail.

Biden says Bank of America is in “pretty” good shape, people’s savings are safe, and he doesn’t see an industry poised to explode.

“If we find that there is more instability than emerges, we will be able to have the FDIC use the powers it has to guarantee those (deposits) above $250,250 as they already do,” he told reporters at a news conference in the Canadian capital Ottawa. After the collapse of

Regional Silicon Valley Bank and Signature Bank , U.S. lenders Founder is facing a crisis of confidence (NASDAQ: SBNY) this month. The turmoil prompted regulators to take the unprecedented step of guaranteeing deposits at SVB and Signature. The US banking system is safe.

Still, investors have sold bank stocks globally over the past two weeks, raising interest rates quickly to curb inflation, which some blamed as the root cause of the collapse.

After a week of volatility, the S&P Bank Index ended slightly lower, while the KBW Regional Bank Index rose 2.9%.

The Swiss government brokered a bailout deal for Credit Suisse further spooking investors.

Biden said the situation would take some time to calm down, but said what happened to Credit Suisse in Europe was irrelevant to U.S. banks.

“I don’t see anything on the horizon that’s going to explode. But I do understand being upset about it,” he said.

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