Even though some semblance of normalcy has returned after the US government intervened to stem the regional banking fallout and the Swiss central bank bailed out Credit Suisse AG CS, fears resurfaced on Friday as investors began to smell problems at German banking giant Deutsche Bank AG DB.
President Joe Biden tried to bring calm to the storm with reassuring comments during a press conference in Ottawa, Canada.
The president said that the banks are in pretty good shape and that his administration will take measures if there is a crisis.
He added that he doesn't see anything on the horizon that is about to explode.
The president also noted that recent events in Europe were not direct consequences of what had happened in the U.S. If there were 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.
It's going to take a while for things to calm down. The president said that he doesn't see anything that is about to explode on the horizon.
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The president said midsize banks need to be able to survive and that they should be able to do so despite the unease surrounding the banking crisis.
Biden also said that people's savings are secure and that the American taxpayer wouldn't have to pay a penny for bailing out banks.
Why It is 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.
The SPDR S&P Regional Banking ETF KRE settled on 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.