Shalanda Young, Biden’s director of the Office of Management and Budget, assured Americans that the banking system was “resilient” amid the collapse of the Silicon Valley Bank (SVP).
The California Department of Financial Protection and Innovation announced that the SVP would be shut down after its stock plunged by 60% on Thursday and 62% in premarket trading Friday. The stock price collapse started a bank run as the tech startup clients of SVP braced for “struggling to make payroll & pay vendors.” (RELATED: Biden Cabinet Member Claims Colorblind IRS Algorithms Are ‘Racially Biased’)
“Treasury Department Secretary Yellen is watching this closely,” the OMB director said. “I know the Secretary has been in touch with regulators throughout the weekend. What I will say about the banking system overall is it is more resilient, it has a better foundation than before the financial crisis. That’s largely due to reforms put in place after the financial crisis.”
Yellen said the Treasury Department is “carefully” watching banks following the SVP collapse during a Friday hearing before the House Ways & Means Committee.
“So you can tell the American people this morning – because I think this has caused a lot of concern – that the U.S. banking system is safe and secure?” CNN’s Kaitlan Collins responded.
“I think the voice here is our Treasury Secretary who is our lead and working with regulators. That’s the appropriate person we should listen to here and she’s tracking this the most closely,” Young said. “What I will say is after the financial crisis, the reforms put in place have given regulators more tools. And our system is more resilient and the foundation stronger because of it.”