Following Silvergate and SVB, a third US bank that finances to tech and crypto sector goes into bankruptcy - President Biden claims that the banking sector is safe

Washington – It revealed that Signature Bank went bankrupt in the United States, followed by Silvergate and SVB. The third US bank failure in a week signals that the country’s banking sector was in trouble. Against this backdrop, President Joe Biden claimed, on Monday, the US banking sector was safe. However, former US President Donald Trump criticised Biden and accused the country was travelling towards the Great Depression of the 1930s.

Last week on March 8, Silver Gate Bank in the US province of California declared bankruptcy. Later, on Friday, the US authorities announced that the Silicon Valley Bank had gone bankrupt. After that, American agencies said they were closing the New York-based Signature Bank on Sunday. Besides, with the collapse of three banks in the United States in just five days, the banking sector’s credibility in the country has been questioned. Its repercussions have also been felt at the international level.

Moreover, Silicon Valley Bank has been recognised as one of the leading 20 banks in the United States among the three failed banks. This bank also has offices abroad. Besides, it has a large scope in countries like the UK. HSBC, the leading bank in the United Kingdom, has taken over the Silicon Valley Bank of this country. In addition, US Treasury Secretary Janet Yellen announced on Sunday that they would not bail out Silicon Valley Bank. However, within a few hours, President Biden declared that the funds in this bank were safe.

Furthermore, President Biden assured that the US banking sector was safe in his address to the American people on Monday morning. At the same time, it was also announced that the funds in Silicon Valley Bank would be made available to the account holders. According to US regulations, the account holder can get up to two and a half million dollars if a bank goes bankrupt. The Federal Deposit Insurance Corporation (FDIC) carries out the process in this regard. However, in view of the repercussions felt after the failure of three consecutive banks, the Biden administration has promised to provide funds to the account holders of both Silicon Valley Bank and Signature Bank.

Both these banks have been associated with US tech startups and the cryptocurrency sector. Both banks have large amounts of accounts and funds for companies in this sector. Besides, the FTX scam has hit the US cryptocurrency sector hard. If the banks in this sector fail, it can have wide and serious consequences. Thus, the Biden administration was said to be active.

Meanwhile, former US President Trump criticised the Biden administration over the crisis in the banking sector. He compared President Biden with the American President Herbert Hoover of the last century, claiming that Biden would be the Hoover of the modern era. Moreover, Trump said the US would have to contend with a more widespread economic depression than in 1929. Saying that banks collapsing in the US was proof of that, Trump drew attention to the new financial crisis.

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