WASHINGTON — President Biden sought on Monday morning to head off any crisis of confidence following the failure of two major banks in recent days, insisting that Americans can have faith in the system even as he emphasized that the rescue does not constitute a taxpayer bailout.
In a brief televised statement from the White House shortly before the markets opened in the United States, Mr. Biden declared that the government was responding decisively to the collapse of Silicon Valley Bank and Signature Bank in a way that would protect depositors without rewarding risk-taking executives and investors.
“Americans can rest assured that our banking system is safe. Your deposits are safe,” the president said. “Let me also assure you we will not stop at this; we’ll do whatever is needed.”
Mr. Biden said that the government would make certain that deposits would be available on Monday so that small businesses can pay their workers and workers can pay their bills. “Your deposits will be there when you need them,” he said.
But he sought to distinguish his intervention from the taxpayer-financed bailout during the financial crash of 2008-09, when the administrations of George W. Bush and Barack Obama steered hundreds of billions of dollars to rescue the bank industry following a systemic crisis. Eventually, the banks repaid the money, but the notion that everyday taxpayers had to rescue wealthy bankers rankled voters and arguably shifted politics in a way that continues to reverberate to this day.
“This is an important point: no losses will be borne by the taxpayers,” Mr. Biden, who was Mr. Obama’s vice president during the latter stage of that earlier crisis, said in his statement on Monday morning. “Let me repeat that: No losses will be borne by the taxpayers.”
The cost to make depositors whole will be financed by fees paid by banks into the Federal Deposit Insurance Corporation, or F.D.I.C. A separate loan program that the Federal Reserve has opened to help keep money flowing through the banking system will be backed by taxpayer money. In a statement on Sunday, the Fed said it “does not anticipate that it will be necessary to draw on these backstop funds.”
Mr. Biden insisted he will impose accountability for the failures. “The managers of these banks will be fired,” he said, adding: “No one is above the law.” And Mr. Biden said that he will ask Congress and banking regulators to consider rule changes “to make it less likely that this kind of bank failure would happen again.”
