House Minority Leader Hakeem Jeffries (D-N.Y.) met with leaders of the San Francisco Federal Reserve Bank on Thursday amid financial uncertainty following the failures of two major banks in the past week.
Jeffries spokesperson Christie Stephenson said in a statement that the congressman spoke with the bank’s leaders about the developments in the aftermath of the collapse of Silicon Valley Bank and Signature Bank as the Democratic Caucus awaits the Fed’s findings from its review of the matter.
Stephenson said Jeffries has been coordinating with federal and state regulators to monitor the situation for several days.
“The banking system remains resilient, and Americans can have faith their deposits will be there when they need them,” she said.
Shock waves ricocheted through the market after Silicon Valley Bank collapsed last Friday, forcing federal regulators to take over the bank on Sunday. The crash occurred when the bank did not have enough cash on hand to fulfill its customers’ withdrawal requests, which caused the bank to need to sell assets and led to a bank run.
The crash was the second largest for a bank in U.S. history and the largest since the Great Recession.
Another bank collapse happened Sunday when Signature Bank, which focused on cryptocurrency, was shut down by New York state regulators after experiencing a similar issue to Silicon Valley Bank.
In response to the failures, the Biden administration announced that customers would have access to their money even if their accounts surpassed the $250,000 limit per account that the Federal Deposit Insurance Corporation guarantees is protected. But President Biden has stressed that the banks would not receive a bailout and taxpayer dollars would not be used to make up for losses for the banks.
The administration has also sought to downplay the potential effects that the bank collapses could have on the broader economy, and stepping in to protect depositors’ money was intended to reduce the risk of additional bank runs.