On March 10, 2023, the Silicon Valley Bank (SVB) failed. This collapse signified the second-largest bank failure in the history of the US (and the largest since the 2008 financial crisis). The failure represented a large threat to our national banking system: as SVB failed on Friday, account holders rushed to withdraw their funds—and not only from SVB. Over the weekend, Signature Bank also failed after experiencing a similar solvency crisis.
President Biden gave some remarks to the American people on Monday, March 13, regarding the future implications of this massive bank failure. He promised that “No losses will be borne by the taxpayers;” rather, the money to be returned to account holders will come from fees that the Deposit Insurance fund collects from banks. He also blamed the Trump administration for loosening some of the banking requirements put in place by the Obama administration. Promising that his administration will look to reinstate the same level of requirements as before, he assured Americans that his goal is “to make it less likely that this kind of bank failure will happen again.”
Now, the question of how our congressional representatives will manage to pass measures protecting our banking system remains, as it is ultimately up to them whether these new requirements will truly be enacted.