On Twitter, US President Joe Biden stated that he is “firmly committed” to bringing individuals responsible for the SVB and Signature collapses “totally accountable.” President of the United States, Joe Biden, has promised to take individuals responsible for the failures of Silicon Valley Bank and Signature Bank accountable while assuring Americans that their savings are secure.
The New York Division of Financial Services (NYDFS) assumed control of the crypto-friendly Signature Bank on March 12. The Federal Reserve further indicated that the closure of Signature Bank was done to defend the US economy and boost public trust in the banking sector.
It also launched a $25 million fund to assist banks that may experience liquidity challenges in the future. On March 13, US President Joseph Biden tweeted to his 29.9 million followers that the agencies had “reached a solution that protects employees, small companies, taxpayers, and our financial system.”
At my direction, @SecYellen and my National Economic Council Director worked with banking regulators to address problems at Silicon Valley Bank and Signature Bank.— President Biden (@POTUS) March 13, 2023
I’m pleased they reached a solution that protects workers, small businesses, taxpayers, and our financial system. https://t.co/CxcdvLVP6l
The President also stated that he is “firmly determined” to bring those who caused the problem “totally accountable.” He suggested that he would “have more to say” in a local speech on Monday.
Nevertheless, many other US lawmakers have lauded recent federal regulator steps to contain the fallout from the current financial and SVB and Signature collapses.
According to a March 12 statement by the U.S. Senate Banking and Housing Committee, U.S. Senator Sherrod Brown and Congressman Maxine Waters were also delighted to learn that both insured and uninsured SVB depositors will be covered:
Today’s actions will enable workers to receive their paychecks and for small businesses to survive, while providing depository institutions with more liquidity options to weather the storm.”
“As we work to understand better all of the factors that contributed to the events of the last few days and how to strengthen guardrails for the largest banks, we urge financial regulators to ensure the banking system remains stable, strong, and resilient, and depositors’ money is safe,” the statement continued.
Silicon Valley Bank depositors, both insured & uninsured, will be made whole by the plan from the FDIC, the Federal Reserve, the Treasury & the White House. And the Fed has created a new facility to support all banks that need liquidity to ensure our banking system is safe.— Maxine Waters (@RepMaxineWaters) March 13, 2023
However, U.S. Securities and Exchange Commission Chairman Gary Gensler has seized the occasion to redouble his agency’s pursuit of wrongdoers without identifying specific businesses.
In a statement issued on March 12, the chairman said that the SEC would be on the lookout for violations of U.S. securities laws:
“In times of increased volatility and uncertainty, we at the SEC are particularly focused on monitoring for market stability and identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly.”
“We will investigate and launch enforcement proceedings if we identify breaches of federal securities laws without speaking to any specific organization or person,” the SEC Chairman stated.
SVB’s closure momentarily sparked the depegging of Circle’s USD Coin (USDC) to as low as $0.88 on March 11 since SVB holds $3.3 billion of Circle’s $40 billion USDC reserves.
Conversely, the USDC is almost back to $1 after the Federal Reserve verified that all client deposits at SVB and Signature collapses will be made in “full.”
Silvergate Bank, another renowned crypto-bank, said last week that it will close and voluntarily liquidate “in light of recent industry and regulatory developments.”
Soon after, Gensler authored an opinion article for The Hill on March 9 in which he threatened U.S. crypto businesses to “perform their job within the confines of the law” or face enforcement action.
As Chair of @SECGov, I have one goal with regard to the crypto markets: to ensure that investors and the markets receive all the protections that they would in any other securities market. How?— Gary Gensler (@GaryGensler) March 9, 2023
Read my op-ed in @thehill: