US President, Joe Bidenthis friday a message of calm to the banking system and he said he hasn’t seen one, although it will take time for the situation to calm down.”explosion on the horizon”.
“I think things will take a while to calm down, but I don’t see anything about to explode on the horizon,” the US president said at a press conference in Ottawa with the Canadian prime minister. Justin Trudeau.
Despite this reassuring message, Biden argued that he understands that “some disturbances” exist, but that his government is doing a “good job”. Ensuring Americans have access to their savings and that the country’s banks have sufficient funds.
calm the markets
Biden’s message is among his government’s attempts to calm the markets. The US banking system is sound and that the authorities will take measures to guarantee savings in the face of the crisis that has emerged in recent weeks as two banks in the country went bankrupt and a third was bailed out.
The panic also crossed the Atlantic and nearly ended with Swiss bank Credit Suisse, which was finally forced to be bought out by rival UBS last weekend, following a crisis of confidence that drove its price down in the market.
About, “What’s happening in Europe is not a direct result of what’s happening in the United States,” Biden said.but he reiterated that his government would guarantee the savings of the Americans.
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The financial situation of two failed US banks, Silicon Valley Bank (SVB) and Signature Bank, has been worsened by the Fed’s monetary policy, which has been raising interest rates since March last year to combat inflation.
So things Fed decided to raise interest rates once again this week, 0.25 pointsWhile Fed Chairman Jerome Powell didn’t rule out that the central bank could stop these increases at its next meeting, he placed them in a range between 4.75% and 5%.
This Friday, the stock market was dragged down by more than 10% after major European banks announced they would pay off the subordinated debt ahead of maturity.
Despite the concerns over the banking sector and the repercussions of the financial crisis, Wall Street closed the week with more than 1% gains in its main indicators, focusing mostly on the messages and actions of financial and monetary policy makers.