Banking experts point out that Silicon Valley Bank could have handled interest rate pressures if Trump and congressional Republicans had not rolled back Dodd-Frank banking regulations.
The New York Times reported:
Some banking experts pointed out on Friday that a bank as big as Silicon Valley Bank might have better managed its interest rate risks if parts of the Dodd-Frank financial regulatory package, put in place after the 2008 crisis , had not been canceled under President Atout.
In 2018, Mr. Trump signed a bill that eased regulatory scrutiny of many regional banks. Silicon Valley Bank chief executive Greg Becker was a strong supporter of the change, which reduced the frequency with which banks with assets between $100 billion and $250 billion had to undergo Fed stress tests. .
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Liz Zelnick, director of economic security and corporate power at Accountable.US, pointed to Trump and congressional Republicans, “‘This mess was left behind by congressional Republicans and the Trump administration who were too deep in the big banks’ pocket to care about the consequences of gutting oversight of the financial industry. The chickens went home this week in the Republican war on Wall Street reform and consumer financial protections Under Dodd-Frank’s Republican pushback, big institutions like Silicon Valley that manage trillions of dollars in assets have much less of a burden to prove they can stand in tough economic times. a serious break to the current MAGA House majority which is pursuing further cuts to consumer financial protections after pr is money in spades from Wall Street banks – but don’t count on it.
The Silicon Valley Bank failure is the largest in the United States since the 2008 financial crisis, and it likely won’t be the last.
Banks that are ill-equipped to deal with the pressures that come with rising interest rates are most at risk of failure.
It’s almost as if regulatory safeguards are needed to protect both consumers and industries from their worst impulses.
Republicans deregulate not on the basis of sound political decisions, but on ideology. The GOP ideology tells them that regulation is bad. Republicans have learned nothing from the financial crisis and the great recession in which they piloted the nation,
The reason it’s often short-sighted and foolish to throw out regulations is because circumstances change.
There is a common thread between the Norfolk Southern train derailment and the collapse of the Silicon Valley Bank.
In both cases, Donald Trump has weakened government rules and oversight. While there may not be a direct causal link between Trump’s actions and the train wrecks/bank meltdowns, the rollback of rules and regulations is helping to create a climate for the worst-case scenario.