US President Joe Biden after the crash of Silicon Valley Bank, has assured the American people and the businesses that they will not put the taxpayers money at risk and assured the depositors that their money is safe whenever they need it. Apart from this, the US treasury, Federal Reserve Board and Financial Deposit Insurance Corporation has assured the depositors that they will be able to access all their money from today, March 13.The California-based Silicon Valley Bank (SVB), the 16th largest bank with over 17 branches in the United States, was closed on Friday by the California Department of Financial Protection and Innovation which later appointed the Federal Deposit Insurance Corporation (FDIC) as its receiver. Reportedly, the bank has been shut by the US regulators, and its assets have been sized by the Federal Deposit Insurance Corporation on March 10. The bank was known for lending money to many tech startups.After authorities took control of Silicon Valley Bank, Janet Yellen, the secretary of the Treasury, Jerome H. Powell, and Martin J. Gruenberg issued a joint statement promising to “completely protect” all depositors who had money in the bank. They also added that Depositors will have all access to their money from March 13 onwards and the tax payers associated with Silicon Valley will not have to bear any losses.On Sunday, US President Joe Biden vowed to hold the people who are responsible for the closer of the Silicon Valley Bank and Signature Bank as the second one after that. However, he assured all depositors that their money was safe. Biden said, “I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of large banks so that we are not in this position again.”Im firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.Ill have more to say on this tomorrow morning.— President Biden (@POTUS) March 13, 2023He also mentioned that he would be speaking today to reassure all Americans after the failure of Silicon Valley Bank and Signature Bank. Meanwhile, the FDIC said in a statement, “We are also announcing a similar systemic risk exception for Signature Bank, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of SVB, no losses will be borne by the taxpayer.” Along with this, the interagency federal statement said that shareholders and certain unsecured debt holders will not be protected.The Federal Bank on Sunday announced that they will make the extra funds available to the depository institutions to help assure that the banks have the ability to meet the needs of all the depositors. According to them, this will ensure the US banking system continues to protect deposits and provide access to credit to its depositors and businesses in a manner that promotes strong and sustainable economic growth.Reason for the failure of Silicon Valley BankOne of the biggest bank failures since the global financial crisis of 2008, Silicon Valley Bank had a strong presence in the tech startup industry and served as the default bank for numerous high-flying firms. The bank failed because customers started withdrawing their savings, sparking a run on the bank, many of whom were venture capital firms and VC-backed businesses that the bank had built up over time.Bank Run: When clients or investors experience a panic attack, they start taking their money out of the bank, making the institution unable to meet its commitments when they become due.Entrepreneurs in Silicon Valley are uneasy and tense following Silicon Valley Banks sudden failure last week. The Federal Deposit Insurance Corporation apparently took action in the midst of the working day on Friday to confiscate Silicon Valley Banks assets, underscoring the gravity of the issue.
