Twitter CEO Elon Musk appeared to criticize President Joe Biden’s fixation on fighting climate change, suggesting the president’s focus was not where it should be given the crisis roiling the U.S. banking sector.
Musk, who in the past has sounded the alarm on global warming but recently indicated there are bigger problems facing humanity, criticized Biden’s post, suggesting the president’s focus isn’t where it should be given the banking sector jitters.
While Musk has championed green energy, he has also been a voice of reason in the transition debate. This includes calling for increased fossil fuel output to ensure ample supply of affordable energy as innovators seek to find cleaner solutions, while saying he opposes moves to “demonize” fossil fuels.
As for Musk’s priorities on climate change, he said in mid-2022 that low birth rates are a bigger problem.
Bank Turmoil
Market sentiment has remained frail after turmoil in the U.S. and European banking sectors in the past two weeks has revived memories of the 2008 global financial crisis.Treasury Secretary Janet Yellen has this week tried to calm frayed investor nerves, telling the American Bankers Association conference on Tuesday that deposit outflows from regional banks have stabilized and that the U.S. banking system “remains sound.”
During a Thursday hearing before the House Appropriations subcommittee, Yellen again sought to send a reassuring message, saying that U.S. financial authorities are prepared to take further steps to make sure Americans’ bank deposits stay safe amid turmoil in the banking system.
“As I have said, we have used important tools to act quickly to prevent contagion,” Yellen said.
“These are tools we could use again for an institution of any size if we judged its failure would pose a systemic risk,” she added.
There have been concerns about the health of U.S. lenders and the economic impact of a potential lending crunch if depositors rush to withdraw their savings from smaller banks, which have outsized roles in supporting key sectors such as commercial real estate.
Following the failure of SVB and Signature Bank, the Federal Reserve set up a swap line under preferential borrowing conditions to give banks access to ample liquidity to meet depositor demand for withdrawals, a move meant to calm depositors and prevent bank runs.
Acting on the basis of a special “systemic risk exception” for the two failed banks, the Federal Deposit Insurance Corporation (FDIC) expanded its $250,000 deposit guarantee cap for SVB and Signature to cover all uninsured deposits in a further bid to shore up financial stability.
While there have been calls for the FDIC to expand this unlimited “blanket guarantee” of deposits to the entire banking sector as a temporary measure to instill further confidence, Yellen said there were no immediate plans to do so.
Still, Yellen said at the American Bankers Association conference that similar actions to the blanket guarantee for SVB and Signature deposits “could be warranted if smaller institutions suffer deposit runs.”
Musk also addressed the elevated risk of regional bank turmoil in a recent reaction to a post by Zerohedge that warned of “another great depression” if the Federal Reserve fails to contain the turmoil in regional banks.