Nancy Pelosi Revamps the Russia Hoax
The Only Way We’ll Survive
Illegal Immigrants Assault New York Police Officers Again
New Charges Filed in Kansas City Parade Shooting
Scientists Are Worried About a New Viral Infection, And It's Got Nothing to...
Prepare Yourself to Be Labeled a Crazy Person
Biden Lost to the Air Force One Stairs Again
Remember Biden's EV Mandate? Well...
Illinois Mayor Accused of Dressing, Behaving Like Movie Gangster
'Trans' Athlete Causes Multiple Injuries in Girls' Basketball Game
No One's Talking About What Was Sent to Speaker Johnson's Home Church
Republicans Host Panel Discussion on Importance of Building the Future of the Party
Do Texans Support Gov. Abbott’s Plan to Militarize the Southern Border?
This British Health Official's Take on Transgender 'Chestfeeding' Is Something Else
It Is Time for More Truth, Transparency and Transformation
Tipsheet

Silicon Valley President's Past Remarks About Risk Regulations Came Back to Haunt Him

AP Photo/Jeff Chiu

While Democrats, especially Sen. Liz Warren (D-MA), try to find a scapegoat for the collapse of Silicon Valley Bank, with Donald Trump being an obvious target, let’s rewind to when its president pushed Congress to loosen regulations before its demise. This wasn’t months before The FDIC took the reins of SVB, but they did dole out mountains of cash to pay for years of lobbying to weaken the regulations. The Guardian has more from a previous report posed on Lever. So, is Donald Trump to blame for their pervasive lobbying to weaken risk regulations, or not, Liz (via The Guardian): 

Advertisement

Eight years before the second-largest bank failure in American history occurred this week, the bank’s president personally pressed Congress to reduce scrutiny of his financial institution, citing the “low risk profile of our activities and business model”, according to federal records reviewed by the Lever. 

Three years later – after the bank spent more than $500,000 on federal lobbying – lawmakers obliged.

… California regulators shut down the Silicon Valley Bank (SVB), a top lender to venture capital firms and tech startups, and the Federal Deposit Insurance Corporation took it over, following a bank run by its customers. The bank reportedly did not have a chief risk officer in the months leading up to the collapse, while more than 90% of its deposits were not insured.

In 2015 Greg Becker, SVB’s president, submitted a statement to a Senate panel pushing legislators to exempt more banks – including his own – from new regulations passed in the wake of the 2008 financial crisis. Despite warnings from some senators, Becker’s lobbying effort was ultimately successful. 

Touting “SVB’s deep understanding of the markets it serves, our strong risk management practices”, Becker argued that his bank would soon reach $50bn in assets, which under the law would trigger “enhanced prudential standards”, including more stringent regulations, stress tests and capital requirements for his and other similarly sized banks. 

Advertisement

Yet, because Trump signed the Systemic Risk Designation Improvement Act, which amended Dodd-Frank, this will always be a talking point for the Left, despite ex-Rep. Barney Frank (D-MA) saying this law had little to no effect regarding SVB’s and now Signature Banks’ collapse. Signature Bank is a cryptocurrency institution. SVB was leveraged heavily with high tech, which has taken a beating on Wall Street; they accrued massive losses, had no risk assessment officer, and caused a run when they had to announce that more capital needed to be raised to cover the losses. The bank’s own decision-making is what hastened its demise, not Trump or any loosening of Dodd-Frank. SVB lobbied to have risk regulations reduced.

Those words from SVB’s president sure came back to haunt.

Join the conversation as a VIP Member

Recommended

Trending on Townhall Videos

Advertisement
Advertisement
Advertisement