Treasury Secretary Janet Yellen says the U.S. government won't be bailing out Silicon Valley Bank, like they did financial institutions during the 2008 banking crisis.
Yellen told CBS Face The Nation "we're not going to do that again." She added that the federal government is most concerned with taking care of depositors.
"Many of them are small businesses that employ people across the country. And of course, this is a significant concern, and we're working with regulators to try to address these concerns," Yellen said.
Silicon Valley Bank was one of the largest tech lenders in the U.S. It collapsed last week after depositors withdrew more than $42 million in a single day.
On Monday, President Joe Biden addressed the collapse and the government's actions, emphasizing that the U.S. banking system is "safe."
"Thanks to the quick action of my administration over the past few days, Americans can have confidence that the banking system is safe," he said. "Because of the actions that our regulators have already taken, every American should feel confident that their deposits will be there if and when they need them."
Biden said the White House took immediate action once it learned about problems at the failed banks and the impact it could have on small businesses and workers.
"On Friday, the government regulator in charge, the FDIC, took control of Silicon Valley Bank's assets and over the weekend, took control of Signature Bank's assets," he said. "All customers who had deposits in these banks can rest assured they'll be protected and they'll have access to their money as of today. That includes small businesses across the country that bank there and need to make payroll, pay their bills and stay open for business."
"No losses -- and this is an important point -- no losses will be borne by the taxpayers," Biden added. "Instead, the money will come from the fees that banks pay into the deposit insurance fund."
Committed to holding those responsible for the mess fully accountable, the president said management running the failed banks will be fired and investors in the banks will not be protected.
"If the bank is taken over by FDIC, the people running the bank should not work there anymore," he said. On investors, Biden added "they knowingly took a risk, and when the risk didn't pay off, investors lose their money. That's how capitalism works."
The president said his administration is continuing to determine how the banks got into these circumstances in the first place and also working to reduce the risk of this happening again. That includes asking Congress to take action, he said.
"During the Obama-Biden administration, we put in place tough requirements on banks like Silicon Valley Bank and Signature Bank, including the Dodd-Frank law to make sure that the crisis we saw in 2008 would not happen again. Unfortunately, the last admin rolled back some of these requirements," he said. "I'm going to ask Congress and the banking regulators to strengthen the rules for banks to make it less likely that this kind of bank failure will happen again."
"Look, the bottom line is this, Americans can rest assured that our banking system is safe. Your deposits are safe," he continued. "Let me also assure you, we will not stop at this. We'll do whatever is needed."
Federal regulators are still working on how to handle the Silicon Valley Bank collapse, the second-largest bank failure in U.S. history.
After last week's collapse, officials had cautioned that some customers would not be able to access their money. The FDIC said insured depositors with accounts up to $250,000 could recover their money. However, the majority of Silicon Valley Bank accounts are not insured and may only be able to recover a portion of their funds, regulators warned.
On Monday, federal regulators walked back that statement, saying all deposits -- both insured and uninsured -- and assets at the former Silicon Valley Bank had been transferred to a newly created, full-service FDIC-operated "bridge bank" in an action designed to protect all depositors.
"Depositors and borrowers will... have customer service and access to their funds by ATM, debit cards, and writing checks in the same manner as before. Silicon Valley Bank's official checks will continue to clear. Loan customers should continue making loan payments as usual," the FDIC said in a statement. "All depositors of the institution will be made whole."
Similar actions were taken for New York-based Signature Bank, which had 40 branches across the country in New York, California, Connecticut, North Carolina and Nevada. Signature Bank had total assets of $110.4 billion and total deposits of $82.6 billion as of December 31, the FDIC said.
The California-based Silicon Valley Bank had 17 branches in California and Massachusetts. As of December 31, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits, according to the FDIC.
A bridge bank is a chartered national bank that operates under a board appointed by the FDIC, the agency said. The bridge bank structure is designed to "bridge" the gap between the failure of a bank and the time when the FDIC can stabilize the institution and implement an orderly resolution.
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