He challenged Congress to enact more stringent regulations, saying that “tough” safeguards brought in after the 2008 financial collapse had been undone under his Republican predecessor Donald Trump.
“I’m going to ask Congress and the banking regulators to strengthen the rules for banks to make it less likely this kind of bank failure would happen again,” Biden said. He made clear he expects the consequences to fall on the shoulders of those responsible and that the government’s rapid response over the weekend was not a bank bailout, as happened in 2008.
“We must get the full accounting of what happened and why, (so) those responsible can be held accountable,” he said. Not only will taxpayers not be liable for covering the deposits, but “the management of these banks will be fired,” he said. Once a bank is taken over by the government, “the people running the bank should not work there anymore.”
Biden stressed that investors who bought into SVB were not getting bailed out. “They knowingly took a risk and when the risks didn’t pay off, investors lose their money. That’s how capitalism works,” he said. However, he acknowledged that the failure of SVB will have an impact on the wider economy, and that’s why he is calling for tougher regulations to prevent future crises.
“We need to make sure that banks are not taking undue risks with people’s money, and that they are held accountable when things go wrong,” he said. “We also need to make sure that the rules are being enforced and that regulators have the resources they need to do their jobs properly,” Biden said that he will work with Congress to pass legislation that strengthens the banking system and protects consumers.
“We owe it to the American people to ensure that their hard-earned money is safe and secure,” he said. “We must learn from this crisis and take action to prevent it from happening again.”