Biden says that US banking system is 'safe'
By Alexander Bueso
Date: Monday 13 Mar 2023
(Sharecast News) - US President Joe Biden told Americans that the country's banking system was safe and vowed to push for stricter regulations.
"Americans can have confidence that the banking system is safe. Your deposits will be there when you need them," Biden said.
In response to those who warned against the so-called 'moral hazard' of backstopping uninsured deposits. the President noted that SVB Financial Group's managers would be fired and that its shareholders and bondholders would lose their money.
On the regulatory front, the President said that he would push for stricter oversight of lenders.
For some observers, the relaxation of the Dodd-Frank banking sector regulations during the Trump administration had played a key role in the current turbulence within the sector.
More specifically, the previous government had lifted the ceiling for a lender to be considered "systemically important" and therefore subject to tighter oversight from $50bn worth of assets to $250bn.
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