hello and welcome to inside politics. i m john king in washington. thank you for sharing your very busy news day with us. call it a biden racy can you. the federal government swoops in to pay back depositors after a bank goes under. he promises 2023 will not look like 2008. the bottom line is this. americans can rest assured our banking system is safe, our deposits are safe. plus mike pence says president trump was reckless on january 6th. a big question now, whether pence repeats it when he s with gop voters in iowa, new hampshire and beyond. and president biden green lights a giant oil project in alaska. progressives are mad again. the drilling project suggests an early move to the middle with an eye on 2024. up first for us, though, a pair of bank failures and a white house emergency plan the president says will protect the economy but not at your expense. president biden speaking this morning before u.s. financial markets opened for trading and before most banks o
the central theme of my book is that the fed has these emergency powers that can do very broad, very crazy things that really have very few limits when you come to think about it. they can do pretty extreme things with them. i think we actually saw the realization of that last night. this facility that the fed has unrolled in order to sort of backstop the banking system is really sweeping, really broad. i think something that we haven t ever seen before. they have basically agreed to take a lot of interest rate risk out of the banking system to allow banks that were sitting at unrealized losses, that had securities that really plunged in value but which they might have to sell to raise money, they can now take those to the fed and get short-term loans in exchange for them. so that is something we haven t seen the fed do before and i think it s a real signal the fed saw this as a very big, very sweeping risk and wanted to get out ahead of it in a decisive way. one of the things you
of bank failures and a white house emergency plan the president says will protect the economy but not at your expense. president biden speaking this morning before u.s. financial markets opened for trading and before most banks opened for business. his goal, make the case to wall street and, yes, to main street that he and his team are on top of things and you should be confident your money and the overall economy is safe. americans can have confidence that the banking system is safe. your deposits will be there when you need them. every american should feel confident their deposits will be there if and when they need them. the speech capping a 36-hour sprint of behind-the-scenes biden administration deliberations. regulators in control of silicon valley bank. they put federal guarantees behind a promise they ll pay
there s already fierce finger point over the silicon valley bank collapse. president biden adding his take, asking congress to revise things that were rolled back during the trump presidency. we must reduce the risk of this happening again. the last administration rolled back some of these requirements. i m going to ask congress and the banking regulators to strengthen the rules for banks to make it less likely this kind of bank failure would happen again. let s take a look at what happened. this is 2018. dodd-frank was passed early in the obama administration after the 2008 financial collapse. in 2018 they came back and revised it a bit. it raised the too big to fail from $50 billion to $250 billion. you re talking medium-sized banks got exempted from the most stringent regulations. it exempted certain banks from stress tests, eliminated living
banks across the country. we can see from the market reaction this morning that not everyone is feeling very calm about this. we re expecting a lot more volatility in the markets because people are wondering a couple of things. what are some of the other hidden risks that are out there that emerged like silicon valley bank unexpectedly because of the pressure of the fed raising interest rates over the past year. the other really is whether there would be some human reaction where people and business owners say i d rather move my money to a bigger bank. so you re out with a very timely new book. we were talking about last week during the uncertainty, the volatility in the economy and the fed being central to it. limitless is the title of the book. the fed can print money on a limitless basis. what tools are you watching that tell you they seem to think they re in control of this, whether it s the fed or fdic or what if you saw happening is, whoa, they see a bigger problem.