By Tashi McQueen,
AFRO Political Writer,
Two significant financial institutions, Silicon Valley Bank (SVB) and Signature Bank, failed to weather a run on its assets over a five-day period beginning March 8 causing them to be abruptly shut down by state and federal officials.
President Biden responded to the crisis quickly in the morning of March 13.
“Americans can rest assured that our banking system is safe. Your deposits are safe,” said Biden in a brief address to the public on March 13. “No losses will be borne by the taxpayers.”
At the end of 2022, SVB had about $209 billion in total assets and Signature Bank had acquired $110.4 billion, according to the Federal Deposit Insurance Corporation (FDIC).
“In light of recent industry events, the National Bankers Association wants to assure consumers that your money is safe with minority banks,” said Nicole Elam, president and CEO of the National Bankers Association. “Minority banks are not exposed to riskier asset classes and have the capital and strong liquidity to best serve consumers and small businesses.”
SVB had 17 branches throughout California and Massachusetts and Signature Bank had 40 branches in New York, California, Connecticut, North Carolina and Nevada.
“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” said the joint statement on March 12. “Depositors will have access to all of their money starting March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
According to federal press releases, Signature Bank was closed down on March 12 by New York’s state authorities and The Silicon Valley Bank on March 10 by Californian officials.
Signature Bank will be resolved similarly to SVB.
FDIC said they will pay uninsured bankers an advance dividend, a portion of the funds they lost, within the coming week. These bankers will get a receivership certificate for the remaining amount of their funds.
Tashi McQueen is a Report For America Corps Member.