The unexpected seizure of two banks in three days by regulators have intensified fears of a broader financial crisis, even as President Biden reassured Americans that the banking system was resilient and that customers’ money was safe.
Following the collapse of Silicon Valley Bank and Signature Bank, banks of various sizes in different parts of the country — from San Francisco-based First Republic Bank to Salt Lake City-based Zions Bank — have been at the center of the turmoil as customers rushed to withdraw their deposits and investors, worried about more runs, re-evaluated their value.
In response to the failures of the two banks, Mr. Biden gave a brief televised statement from the White House on Monday, saying that the government was responding decisively in ways that would protect depositors without rewarding risk-taking executives and investors.
“Americans can rest assured that our banking system is safe — your deposits are safe,” the president said. “Let me also assure you we will not stop at this; we’ll do whatever is needed.”
Despite the echoes of the 2008 financial crisis, when 465 banks failed within four years, sometimes dozens in a month, regulators and banking officials were quick to insist that the current panic is far more contained, and that the banks whose stocks tanked had enough funds to meet their obligations.
Last week, Silvergate, a cryptocurrency focused bank, said it would shut down; between Friday and Sunday, the government seized Silicon Valley Bank and Signature Bank.
On Monday, the Federal Reserve announced that it would conduct a review of Silicon Valley Bank’s oversight. The Federal Reserve Bank of San Francisco, on whose board the former chief executive of Silicon Valley Bank, Gregory Becker, sat until Friday, was responsible for supervising the failed bank.
“The events surrounding Silicon Valley Bank demand a thorough, transparent and swift review by the Federal Reserve,” Jerome H. Powell, chairman of the Federal Reserve, said in a release.