Benzinga - Even though some semblance of normalcy has returned after the U.S. government intervened to stem the regional banking fallout and the Swiss central bank bailed out Credit Suisse AG (NYSE: CS), fears resurfaced on Friday as investors smelled trouble at German banking giant Deutsche Bank AG (NYSE: DB).
President Joe Biden, however, strived to bring calm to the storm with reassuring comments during a press conference in Ottawa, Canada.
What Happened: “The banks are in pretty good shape,” the president told the media, in response to a question about his confidence in containing the banking crisis and the measures his administration would take if there was a contagion.
"I don’t see anything on the horizon that’s about to explode," he added.
The president also noted that recent events in Europe weren’t direct consequences of what had happened in the U.S. If there were to be more instability than there is now, the government would be in a position to have the Federal Deposit Insurance Corporation guarantee loans above $250,000 as it did already, he said.
“And so I think it’s going to take a little while for things to just calm down. But I don’t see anything that’s on the horizon that’s about to explode,” the president said.
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While acknowledging the unease around the banking crisis, the president said that midsize banks have to be able to survive and that they should be able to do so.
Biden also said that people’s savings are secure and that the American taxpayer wouldn't need to pay a penny for bailing out banks.
Why It’s Important: On Wednesday, Treasury Secretary Janet Yellen spooked the market by saying that system-wide insurance for deposits above $250,000 wouldn't be in the cards. That is despite analysts and investors calling for immediate action.
In other news, reflecting confidence in averting the crisis, the SPDR S&P Regional Banking ETF (NYSE: KRE) settled Friday's session 3.03% higher at $43.52, according to Benzinga Pro data. The exchange-traded fund recovered from being down 2.3% during the day.
Read Next: S&P 500 Volatility Continues As Investors Digest Latest Banking Sector Headlines
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