President Joe Biden met with reporters on Monday at the Rose Garden in the White House to address the second-largest bank failure in U.S. history after Washington Mutual’s collapse in 2008….(read more)

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On April 5th, 2021, US President Joe Biden commended the country’s financial regulators for their swift and effective handling of a major bank failure that threatened to disrupt the economy.

The incident in question involved Archegos Capital Management, a hedge fund that had built up massive positions in various companies using borrowed money. When some of those bets went sour, Archegos couldn’t meet its financial obligations, triggering a cascade of margin calls from its lenders.

The domino effect of these margin calls sent shockwaves through the financial system, causing billions of dollars in losses for several major banks, including Credit Suisse and Nomura. However, thanks to the regulatory oversight of the Federal Reserve and the Securities and Exchange Commission, the fallout was contained and didn’t spread to the wider economy.

In a statement released by the White House, President Biden praised the regulators for their “swift action and strong leadership” in responding to the crisis. He also emphasized the importance of robust financial regulation in protecting the stability of the US financial system.

“As we have seen time and time again, effective regulation is essential to preventing financial crises and protecting consumers,” the President said. “I am grateful to the Federal Reserve, the SEC, and other regulators for their tireless work in ensuring the safety and soundness of our financial markets.”

The President’s comments echoed the sentiments of other policymakers and analysts who have praised the regulators’ handling of the Archegos debacle. Many have noted that the incident could have been much worse if not for the early intervention and coordination of the various regulatory agencies.

At a time when there is growing concern about potential risks in the financial markets, Biden’s words offer reassurance that the government is committed to ensuring the safety and stability of the US financial system. By acknowledging the hard work and dedication of the regulators, the President has also given a nod to the importance of their role in preventing financial crises and securing the economy’s long-term health.