On 3/10/2023, Biden’s top econ couldn’t answer the question. Top Biden Econ Advisor Rouse Downplays Largest Bank Collapse Since 2008 Financial Crisis
Reporter: Can I ask you one more on SVB? It is the 19th-largest bank in the U.S. It went down in about 40 hours. What do you say to Americans who have real concerns today about their hard-earned savings and money?
Chair Rouse: Yeah, absolutely. And this is why we have the FDIC and other safeguards in place in our banking system. And what I would say to them is that our Secretary of the Treasury, Secretary Yellen; the bank regulators; those who will provide the guardrails and our safeguarding are closely watching and are prepared to use the tools that they need.
The FDIC stepped in very quickly here. And that’s what they were doing is protecting the deposits of those up to $250,000.
Q: other banks may fail as well?
Reporter: Just wondering if we can get your reaction to the failure of Silicon Valley Bank and whether you’re concerned that other banks may fail as well.
Chair Rouse: So — sure. So, the most important thing that I will say here is that our Secretary of the Treasury, Secretary Yellen, is closely tracking the developments with S- — the Silicon Valley Bank.
Reporter: And one more on that same topic. You know, the government obviously insures up to $250,000. But this bank served a lot of tech companies that obviously had a lot more money in — stored with them. So, how concerned are you that we could see a ripple effect just throughout this specific sector?
Chair Rouse: So, two things. One, I’ll refer you to the FDIC for how they plan — intend to handle — we know they’re insured up to 250- — and how they’ll handle those with balances above that. And the second, I just want to re-emphasize that we are in a fundamentally different position that — you know, with the reforms of the global financial crisis of 2007, 2008, we’ve put in place stress tests and other tools that our regulators have to provide more resilience to our banking system. So, you know, Secretary Yellen is watching this closely.
Q: is interest rate risk is at a level right now that perhaps banks haven’t been dealing with for a very long time
Reporter: just to follow up on Mary’s question. I think one thing that’s different in the wake of 2008, despite everything that’s been put into place in the wake of Dodd-Frank, is interest rate risk is at a level right now that perhaps banks haven’t been dealing with for a very long time. Do you feel comfortable that the banking industry writ large is both cognizant of the risk and prepared for it in a different way than maybe SVB was?
Chair Rouse: So, what I would say is that our banking system has — understands these kinds of heightened risks, and that I have full faith and confidence in our regulators. You know, Secretary Yellen has been
Q: Silicon Valley Bank bailout? A: Yellen is closely tracking
Reporter: Can I go back to Silicon Valley Bank for a second? There’s the CEO — I believe Y Combinator — that has hundreds of its portfolio companies tied to the bank. And the CEO said that this is a, quote, “extinct-” — “extinction-level event” for startups if regulators and lawmakers don’t act quickly to give it some liquidity. So, I’m wondering if the administration believes right now whether that kind of intervention is needed.
I don’t know if I’m supposed to say the word “bailout,” but — (laughs) — but what is the — what is the White House thinking on that?
Chair Rouse: What I would say is that Secretary Yellen is closely tracking
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Biden Advisor Rouse Downplays Largest Bank Collapse Since 2008, Silicon Valley Bank bailout? A: Yellen tracking