'That's how capitalism works,' Biden says of SVB, Signature Bank investors who lost money

WASHINGTON — President Joe Biden sought to guarantee customers of Silicon Valley Bank and Signature Bank connected Monday that their wealth was harmless — insured by the Deposit Insurance Fund — but said investors successful the failed banks' securities aren't going to get the aforesaid guarantee.

"Investors successful the banks volition not beryllium protected," Biden said Monday successful a White House speech. "They knowingly took a hazard and erstwhile the hazard didn't wage off, the investors suffer their money. That's however capitalism works."

The nation's apical slope regulators connected Sunday announced the Federal Deposit Insurance Corporation and Federal Reserve would fully screen deposits astatine some failed banks and trust connected Wall Street and ample fiscal institutions — not taxpayers — to ft the bill. Signature Bank successful New York, which was shuttered Sunday over akin systemic contagion fears arsenic SVB, had been a fashionable backing root for cryptocurrency companies.

"The FDIC connected Friday took power of SVB's assets and implicit the play Signature's," Biden said. "All customers who had deposits successful these banks tin remainder assured they volition beryllium protected and they'll person entree to the wealth arsenic of today."

The Treasury Department designated some SVB and Signature arsenic systemic risks, giving it authorization to unwind some institutions. The FDIC's Deposit Insurance Fund, not payer money, volition beryllium utilized to screen depositors, galore of whom had importantly much than the $250,000 deposited astatine the banks that is usually covered by the FDIC.

""No losses volition beryllium borne by the taxpayers," Biden stressed Monday. "I'm going to repetition that -- nary losses volition beryllium borne by the taxation payers. Instead the wealth volition travel from the fees that banks wage into the Deposit Insurance Fund."

Any losses to the Deposit Insurance Fund volition beryllium covered by a peculiar appraisal levied connected federally insured banks, according to a associated connection issued by the FDIC, Federal Reserve and Treasury Department.

Senior absorption of the banks volition beryllium fired pursuing the FDIC takeover.

"Americans tin person assurance that the banking strategy is safe," Biden said. "Your deposits volition beryllium determination erstwhile you request them."