New York Governor Kathy Hochul said on Monday that “the New York State Department of Financial Services took possession of a New York Chartered Bank known as Signature last night”.

“While that sounds extraordinary, that is what happens in terms of the transition from a temporary hold by the state and it's merely turned over to the FDIC,” she said.

“And this all is in the aftermath of what happened on Friday ... [with] Silicon Valley Bank out in California. And this had an effect on a bank here in particular Signature Bank,” she added.

Bank stocks plunge at the open on Wall Street following failures of two banks; investors seeking safety rush into bonds.

Mr Biden spoke of the possible measures being taken to prevent a similar crisis from happening again.

He spoke of the requirements put in place during the Obama-Biden administration, and he criticised the Trump administration for rolling some of them back.

“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,” Mr Biden said. “And to protect American jobs and small businesses.”

Mr Biden said on Monday that “investors in the banks will not be protected”.

“They knowingly took a risk. And when the risk didn't pay off, investors lose their money. That's how capitalism works,” he added.

Mr Biden emphasized that “no losses will be borne by the taxpayers. Instead, the money will come from the fees that banks pay into the Deposit Insurance Fund”.

“The management of these banks will be fired. If the bank is taken over by FDIC, the people running the bank should not work there anymore,” Mr Biden said.

Mr Biden said in his speech on Monday that “Americans can have confidence that the banking system is safe”.

“Your deposits will be there when you need them. Small businesses across the country that have deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills,” he added.

Mr Biden said on Monday morning that no losses will be borne by the taxpayers.

“Treasury Secretary Yellen and a team of banking regulators have taken immediate action ... all customers ... can rest assured ... they will be protected, and they'll have access to their money as of today. That includes small businesses across the country that bank there and need to make payroll, pay their bills and stay open for business – no losses. And this is an important point – no losses will be borne by the taxpayers,” he said.

In a statement on Sunday evening, the president said that he will deliver remarks on how the US will maintain a resilient banking system to protect America’s “historic economic recovery”.

“Over the weekend, and at my direction, the Treasury Secretary and my National Economic Council Director worked diligently with the banking regulators to address problems at Silicon Valley Bank and Signature Bank,” Mr Biden said.

“I am pleased that they reached a prompt solution that protects American workers and small businesses, and keeps our financial system safe. The solution also ensures that taxpayer dollars are not put at risk.”

The president added that he is “firmly committed to holding those responsible for this mess fully accountable”.

California regulators shut down Silicon Valley Bank last Friday, marking the biggest US bank failure since the 2008 global financial crisis.

Shares in First Republic Bank more than halved in premarket trading on Monday amid ongoing concerns about the stability of global finances following the collapse of Silicon Valley Bank.

First Republic on Sunday said it had secured additional financing through JPMorgan Chase & Co (JPM.N), giving it access to a total of $70 billion in funds through various sources.

The lender also said it had an additional borrowing facility from the U.S. Federal Reserve.

Despite the cash infusion, Raymond James double downgraded the bank’s stock to “market perform” from “strong buy”, highlighting the risk of deposit outflows that First Republic faces from panicked large depositors after the bank run at SVB last week.

The bank’s stock was last down 74% at $21.11 on Monday.

“While the bank (SVB) is better positioned for potential deposit outflows on Sunday evening than it may have been earlier in the weekend, if there are net deposit outflows, it will shrink the EPS power of the bank,” Raymond James analyst David Long wrote in the note.

US authorities launched emergency measures on Sunday to shore up confidence in the banking system after the failure of Silicon Valley Bank (SIVB.O) threatened to trigger a broader financial crisis.

First Republic’s shares were leading losses among other regional lenders, with Western Alliance (WAL.N) down over 26% in trading before the bell.

Additional reporting from Reuters