Biden on banking response: ‘We’ve done a pretty damn good job’

President Biden on Friday defended his administration’s handling of concerns about a banking crisis after the failure of two mid-sized banks, acknowledging it may take time for things to “calm down.”

Biden at a press conference with Prime Minister Justin Trudeau acknowledged it may take some time for the markets and the broader public to settle down after the failure of Silicon Valley Bank (SVB) and Signature Bank, but that he doesn’t see a breakdown in the system looming.

“I think we’ve done a pretty damn good job,” Biden said, offering assurance that Americans’ savings are secure and noting that the Treasury Department and other agencies moved to fully insure deposits at Silicon Valley Bank and Signature Bank above the standard limit of $250,000.

“The banks are in pretty good shape. What’s going on in Europe isn’t a direct consequence of what’s happening in the United States,” Biden continued. “So, I think it’s going to take a little while for things to just calm down but I don’t see anything on the horizon that’s about to explode.”

“But I do understand there’s an unease about this and these mid-size banks have to be able to survive, and I think they’ll be able to do that,” he added.

Biden said if there appeared to be more instability, the FDIC and other agencies could use the power they have to guarantee funds above $250,000 as it did with Silicon Valley Bank and Signature Bank deposits.

Those two banks failed earlier this month after account holders started pulling out their money rapidly. Days later, a consortium of 11 larger banks provided $30 billion to prop up California-based First Republic after its credit was downgraded by ratings agencies including Fitch, which cited “uninsured deposits as a percentage of total deposits” as a reason for the demotion.

The government’s move to insure wealthy account holders at SVB and Signature above the FDIC’s $250,000 standard insurance limit raises the question of whether all accounts in the $26 trillion banking sector are now implicitly insured by the Federal Reserve and Treasury — and ultimately the U.S. taxpayer.

Biden last week urged Congress to give the FDIC more power to punish executives in charge of banks that fail and require assistance from the federal government.

Meanwhile in Europe, UBS, the largest bank in Switzerland, is set to take over Credit Suisse as part of an emergency purchase meant to avoid a broader global banking crisis.

Updated at 6:16 p.m.