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Biden administration faces bipartisan criticism as regulators rush to stave off banking crisis

New York based Signature Bank taken over by regulators as government vows to protect account holders at Silicon Valley Bank.

March 12, 2023 7:49pm

Updated: March 13, 2023 5:48am

Amid bipartisan criticism it was too slow to act,  the Biden administration is accelerating efforts to stave off an epic financial crisis as regulators seized control of a newly failed bank in New York while assuring account holders at the shuttered Silicon Valley Bank in California their money will be protected and made available soon.

With hours before markets opened in Asia, regulators at the U.S. Treasury Department, Federal Reserve Bank and the Federal Deposit Insurance Corp. tried to calm jitters worldwide Sunday while combating the factors that caused the first bank in Santa Clara, Calif., to fail.

“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system," the agencies said in a joint statement. "This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth." 

The statement came as officials disclosed that Signature Bank had failed and was being seized by regulators in New York. With more than $110 billion in assets, Signature Bank is one of the largest bank failures in U.S. history behind the $175 billion Silicon Valley Bank that collapsed last week.

Federal regulators said all Silicon Valley Bank clients will be protected and have access to their funds soon and no taxpayer dollars would be needed to make customers whole.

Hoping to thwart any further runs on banks, program, the Federal Reserve unveiled an emergency lending program for other troubled banks so they can “meet the needs of all their depositors.”

But the administration faced withering criticisms that it had been too slow to react to warning signs in recent days. 

“Right now things move at the speed of Twitter, and the government doesn’t move at that speed,” said Rep. Rho Khanna , D-Calif., whose district included the Silicon Valley Bank.

Conservative columnist Liz Peek wrote on Fox News there was “plenty of blame to go around.”

“When a financial institution goes under, you have to wonder: where were the regulators? After all, there were more red flags than you see at a CCP convention,” she said.

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