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Biden says banking crisis has calmed down

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U.S. President Joe Biden delivers remarks on the banking crisis after the collapse of Silicon Valley Bank (SVB) and Signature Bank, in the Roosevelt Room at the White House in Washington, D.C., U.S. March 13, 2023. REUTERS/Evelyn Hockstein

U.S. President Joe Biden said on Friday the banking crisis after the recent collapse of the Silicon Valley Bank (SVB) (SIVB.O) and Signature Bank (SBNY.O) has calmed down.

“Yes,” Biden told reporters when asked if the banking crisis had calmed down.

Biden has sought to reassure investors and depositors the global banking system is safe as financial stocks have lost billions of dollars in value since the collapse last week. Biden, earlier this week, promised Americans that their deposits are safe.

Californian regulators shuttered Silicon Valley Bank last Friday and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. It was the largest collapse since Washington Mutual failed during the financial crisis of 2008.

On Friday, the bank’s parent, SVB Financial Group, said it had filed for reorganization under Chapter 11 bankruptcy protection.

Earlier on Friday, Biden had called on Congress to give regulators greater power over the banking sector, including leveraging higher fines for managers, clawing back executives’ compensation and barring officials from failed banks.

Specifically, Biden is asking Congress to give the FDIC greater authority to claw back compensation, “including gains from stock sales – from executives at failed banks like Silicon Valley Bank and Signature Bank,” the White House said on Friday.

Democrats who have been calling for tougher banking regulation were quick to hail Biden’s statement, but it is unclear whether it has bipartisan support in Congress.

Silicon Valley Bank CEO Greg Becker sold $3.6 million worth of shares in late February, about two weeks before the bank entered FDIC receivership, Bloomberg and CNBC reported.

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