Roger Altman, a former executive at Signature Bank and Silicon Valley Bank, warned Tuesday that the government’s intervention in these two financial institutions, now defunct, “effectively nationalizes” the U.S. banking sector.
After President Joe Biden stated that the U.S. would guarantee deposits at SVB, despite the FDIC offers a maximum guarantee limit of $250,000.
The former deputy secretary to the Treasury Department stated that the Biden administration’s actions were “absolutely profound” during an interview on CNN This Morning.
They guaranteed all deposits at Silicon Valley Bank. He said that what that actually means, although they won’t tell you, is that they have guaranteed all deposits in the U.S. financial system, including the entire deposit pool.
“Why? He explained that you cannot guarantee all deposits at Silicon Valley Bank, and then the next morning say to depositors at First Republic, sorry, but yours aren’t guaranteed –of course they are.”
Altman, a Clinton administration employee, said that the federal government is on the brink of nationalizing the banking sector.
This is a remarkable step that effectively nationalizes and federalizes the U.S. deposit base. He said that you could call it a bailout or something else. But it was really profound.” “Now, authorities, including the White House won’t say that, because I just stated that they had just nationalized the bank system. Technically speaking, they haven’t. However, in a broad sense, they seem to be.
“This is a breathtaking step which effectively nationalizes or federalizes the deposit base of the U.S. financial number. You can call it a bailout, you can call it something else, but it’s really absolutely profound.”
Clinton’s Deputy Treasury Secretary joins @kaitlancollins pic.twitter.com/KrYXRv8z6Y
— CNN This Morning (@CNNThisMorning) March 14, 2023
Altman explained that the federal government’s actions will forever alter the relationship between taxpayers and the banks, even though the banking system was not nationalized.
“Normally, the term “nationalization” means that the government takes control of an institution and makes its own. He said that this would be the kind of nationalization we’ve seen in many countries around the globe. “Obviously, this did not occur here.”
He added that “When you guarantee the entire deposits base, you put the federal government in a different position in terms of protection than it was a week ago.”
