Biden faces massive political risks from banking turmoil

President Joe Biden could be damned if he saves the banks or damned if he doesn’t.

Another major industry intervention to prop up a bank on Thursday – not by the government but under the auspices of the administration – underscored the still grave political peril of the sudden crisis that erupted just over a week ago. It also pushed the administration farther onto a fragile limb that could snap if the bank meltdown were to get worse.

Some of the country’s most powerful banks, including JPMorgan Chase, Wells Fargo, Citigroup and Truist, combined to shore up teetering First Republic Bank in a $30 billion cash infusion meant to ease anxiety in the markets, head off a domino effect of more bank failures and demonstrate the industry still has a solid foundation.

This came days after the White House used the Deposit Insurance Fund, a $100 billion facility funded by premiums banks pay to the Federal Deposit Insurance Corporation, to guarantee deposits in Silicon Valley Bank, which collapsed last week, and Signature Bank, which regulators shut down.

The picture here is of the banking industry saving itself – and not of the government bailing out rich bankers whose recklessness put the savings, prosperity and peace of mind of Americans at risk.

It’s a narrative that the president badly needs to stick.