US President Joe Biden told a press conference in Canada that he does not see an “explosion” on the horizon for the banking system and assured that his government has done a good job of ensuring that Americans can access their savings and that US banks are adequately funded. This is part of the government’s efforts to calm the markets and ensure that the US banking system is sound and that the authorities will take steps to protect savings in the face of the crisis unleashed by the failure of two US banks and the bailout of a third.
Biden reiterated that the financial situation in Europe is not a direct consequence of what has happened in the United States but assured that his government will guarantee the savings of Americans. In addition, it has been agreed between the United States and Canada to invest billions of dollars in the development of semiconductors and to strengthen the mineral supply chain, among other projects. The US will provide an additional $50 million to fund companies in both countries that are engaged in mining and processing minerals, while Canada will provide up to an additional C$250 million to boost projects related to semiconductor production. It has also pledged $7.5 billion to build a network of electric vehicle fast-charging stations.
As for the failed banks in the United States, Silicon Valley Bank (SVB) and Signature Bank, their financial situation was worsened by the monetary policy of the Fed, which has been raising interest rates to combat inflation since March last year. Despite this, the Fed has decided to raise interest rates once again this week to a range between 4.75% and 5%, although its chairman, Jerome Powell, has not ruled out that the central bank could pause these hikes at its next meeting. In Europe, the major banks have recorded another day of falls on the stock markets, dragged down by the fall of Deutsche Bank after it announced that it was going to redeem subordinated debt before its maturity.