Washington is anxiously watching if the collapse of the Silicon Valley Bank will lead to greater economic unrest as the government attempts to make sure its depositors receive their money. While Republicans are blaming everything from Twitter to the woke mob. Democratic senator and Wall Street opponent Elizabeth Warren said the California-based institution’s misstep is a reminder that relaxing banking laws in 2018 was not a smart idea. Yet on the campaign trail for 2024, Nikki Haley used the most infamous b-word to describe the government’s intervention: “BAILOUT”.
Joe Biden approved a big oil and gas drilling project in Alaska while safeguarding the Arctic seas and millions of acres elsewhere in the state from petroleum exploration. Environmental organizations are incensed.
Senator Bill Cassidy, a Republican, claims that Social Security is similar to Silicon Valley Bank.
After serving on the board of a bank that has since closed, Barney Frank, an advocate of financial regulation during his tenure in Congress, stated that he did not believe that stricter regulations would have prevented the recent insolvencies.
It turns out that Rupert Murdoch hasn’t watched Succession.
“Americans can have confidence that the banking system is safe. Your deposits will be there when you need them.” Biden stated.
The managers of the banks will be fired, Biden noted, and investors will lose money. “They knowingly took a risk, and when the risk didn’t pay off his adjusters lose their money. That’s how capitalism works,” he continued.
With the worst U.S. bank failure since the 2008 financial crisis, Biden also promised new regulations. Republicans under former president Donald Trump pushed back some of the Dodd Frank law, which was passed in the wake of that crisis to prevent a repetition, he pointed out.
In 2018, regulations put in place after U.S. banks used aggressive mortgage lending practices to cause a worldwide financial crisis in 2008 were substantially reversed by former President Donald Trump.
Republicans advocated for revisions to the Dodd-Frank Act that increased from $50 billion to $250 billion the amount at which banks are deemed systemically dangerous and are subject to more stringent regulation. At the end of the previous year, the Silicon Valley bank had $209 billion in assets.
As a result of Republicans taking control of the House of Representatives in January, Biden, a Democrat, must work with a split Congress and may find it difficult to pass additional restrictions for American banks.