In view of the turbulence in the banking sector, US President Joe Biden is trying to ease the situation. “I think it will take a while for things to settle down, but I don’t see anything on the horizon that’s about to explode,” Biden said yesterday during a visit to neighboring Canada. He understands that there is uneasiness. “These mid-tier banks need to be able to survive, and I think they will,” Biden said. He indicated that the US government would take further action if necessary.

The trigger for the banking crisis that broke out in early March was the liquidation of the US financial group Silvergate Capital, which is geared towards the crypto industry. A few days later, the US lender Silicon Valley Bank, which specializes in start-up financing, was placed under the control of the US deposit insurance FDIC and closed. Other small financial institutions also stumbled, the Signature Bank collapsed completely. The emergency takeover of Swiss Credit Suisse by UBS also made international headlines.

In the case of Silicon Valley and Signature Bank, the US government guaranteed deposits in excess of the $250,000 legal guarantee limit. US Treasury Secretary Janet Yellen has already signaled that this is possible even if more banks should fail. Biden made a similar statement. If there is more instability, the FDIC could once again act as it has already done, he said.