Multiple banks have recently faced collapse, causing concern that taxpayers may bear the burden of rescuing these institutions.
President Joe Biden told Americans that “no losses would be borne by the taxpayers.” The federal government has taken over and secured the banks, ensuring that depositors can get their money back even if the bank doesn’t have it. The money for this backup will come from the fees that banks pay into the Deposit Insurance Fund.
Despite skepticism about Biden’s promise, the Federal Reserve Board of Governors has taken proactive steps to address concerns regarding potential negative economic repercussions from the bank failures. Specifically, the board pledged to ensure that depositors of Silicon Valley Bank have immediate access to their funds this week. The Fed board also said taxpayers will not pay the bills.
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