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Trump-Era Deregulation Deemed a Key Culprit in the Failure of Silicon Valley Bank

adrina

adrina

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Joined
Feb 27, 2017
Posts
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https://www.commondreams.org/news/t...key-culprit-in-failure-of-silicon-valley-bank

In 2018, ignoring the vocal warnings of experts and advocacy groups, the then-Republican-controlled Congress passed legislation that weakened post-financial crisis regulations for banks with between $50 billion and $250 billion in assets, sparking fears of systemically risky failures and more taxpayer bailouts.

Silicon Valley Bank (SVB), the California-based firm that collapsed on Friday, controlled an estimated $212 billion, leading analysts and lawmakers to argue that the 2018 law made the institution's market-rattling failure and resulting federal takeover more likely.

Sen. Elizabeth Warren (D-Mass.), who was an outspoken opponent of the deregulatory measure, said in a statement Friday that "President Trump and congressional Republicans' decision to roll back Dodd-Frank's 'too big to fail' rules for banks like SVB—reducing both oversight and capital requirements—contributed to a costly collapse."
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And they're not alone.

https://www.cnn.com/2023/03/12/investing/stocks-week-ahead/index.html

Silicon Valley Bank’s collapse last week sent tingles of panic down investors’ spines as it highlighted a larger problem across the banking sector: The widening gap between the value large lenders place on the bonds they hold and what they’re actually worth on the market.

SVB’s downfall was tied, in part, to the plunge in the value of bonds it acquired during boom times, when it had a lot of customer deposits coming in and needed somewhere to park the cash.

But SVB isn’t the only institution with that issue. US banks were sitting on $620 billion in unrealized losses (assets that have decreased in price but haven’t been sold yet) at the end of 2022, according to the FDIC.
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"Conservative" "economic" "policy" at work.
 
https://www.cnn.com/2023/03/12/investing/svb-customer-bailout/index.html

In a related action, the government shut down Signature Bank, an SVB rival that was teetering on the brink of collapse in recent days. Signature’s customers will receive a similar deal, ensuring that even uninsured deposits will be returned to them Monday.


In a joint statement Sunday, Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and Federal Deposit Insurance Corporation Chairman Martin J. Gruenberg said the FDIC will make SVB and Signature’s customers whole. By guaranteeing all deposits – even the uninsured money that customers kept with the failed banks – the government aimed to prevent more bank runs and to help companies that deposited large sums with the banks to continue to make payroll and fund their operations.


The Fed will also make additional funding available for eligible financial institutions to prevent runs on similar banks Monday.
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Can we please quit fucking pretending that catering to the rich is good for the economy?
 
JohnnySavage said:
Agreed.

The Dems should never have voted to repeal parts of Dodd Frank in 2018. But parties were had and money was flowing to war chests.

Such is the way of politics.
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Yup. The dems should not have. And many of them didn't. Most of them didn't. Whereas all republicans did.

Let's do the history and math.

Crapo - a republican - introduced it.

House: Democrats 158 no, 33 yes. Republicans 1 no, 225 yes.
Senate: Democrats 31 no, 15 yes. Republicans 0 no, 52 yes.

It's funny how you just can't seem to put that together in a coherent thought without trying to own the libs.

Is that all there is to the conservatives? Fuck history, fuck reality. Just gotta own the libs while ignoring the splinter in your eye.

Good for you buddy.
 
As one of the most hateful, partisan posters here, you have a stunning lack of self-awareness.
 
JohnnySavage said:
As one of the most hateful, partisan posters here, you have a stunning lack of self-awareness.
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And yet, you can't refute that it was a Republican push to deregulate banking as well as most other areas.

So you attack Adrina instead. And she's the hateful one?
 
zipman said:
And yet, you can't refute that it was a Republican push to deregulate banking as well as most other areas.

So you attack Adrina instead. And she's the hateful one?
Click to expand...

The KEY cause of the bank's failure was the poor decision making of the bank's board of directors. That they were legally allowed to make those poor decisions is in no way the fault of anyone else. They, like everyone else, are all solely responsible for the things they did.

But you fuckwits just have to blame Trump for it out of bitter spite anyway.
 
JohnnySavage said:
As one of the most hateful, partisan posters here, you have a stunning lack of self-awareness.
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She swims in a pool of bile of her own making. And blames everyone else for her lot in life while pointing out that she's better than everyone else because she has a pool to swim in.
 
HisArpy said:
She swims in a pool of bile of her own making. And blames everyone else for her lot in life while pointing out that she's better than everyone else because she has a pool to swim in.
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Once again, Harpy is melting down faster than a corrupt and deregulated bank.
 
zipman said:
And yet, you can't refute that it was a Republican push to deregulate banking as well as most other areas.

So you attack Adrina instead. And she's the hateful one?
Click to expand...
johnny stopped listening to facts when he became one of the disciples of wat's thread.

johnny has never called anything with a penis "hate-filled."

don't be like johnny.
 
adrina said:
https://www.commondreams.org/news/t...key-culprit-in-failure-of-silicon-valley-bank



And they're not alone.

https://www.cnn.com/2023/03/12/investing/stocks-week-ahead/index.html




"Conservative" "economic" "policy" at work.
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Is Barney Frank a conservative? He endorsed those changes to his own Dodd-Frank law in 2018. Even more noteworthy because he sits on Signature Bank's board, which just collapsed.

Are Senators (and former senators) who voted for the bill, including Bennett, Carper, Coons, Donnelly, Hassan, Heitkamp, Jones, Kaine, King Manchin, McCaskill, Nelson, Peters, Shaheen, Stabenow, Tester, and Warner conservatives?


https://www.washingtonpost.com/news...new-banking-law-few-knew-he-works-for-a-bank/
 
JohnnySavage said:
Agreed.

The Dems should never have voted to repeal parts of Dodd Frank in 2018. But parties were had and money was flowing to war chests.

Such is the way of politics.
Click to expand...
Did the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 address how asset reserve valuations are set for banks with assets between $50 billion and $250 billion? More specifically, would SVB have been disallowed valuing those long term fixed asset treasury bonds at par if the bill had not passed? It’s a relevant question, especially now that the bailout announced over the weekend makes SVB and other banks eligible for one year loans with bond collateral valued at par rather than market value.
 
Dodd Frank was an incredible amount of regulation and for the most part did what it was intended to do....protect consumers from risky banking practices. Anyone who voted to repeal parts of it should be raked over the coals electorally.
 
Last edited:
HisArpy said:
The KEY cause of the bank's failure was the poor decision making of the bank's board of directors. That they were legally allowed to make those poor decisions is in no way the fault of anyone else. They, like everyone else, are all solely responsible for the things they did.

But you fuckwits just have to blame Trump for it out of bitter spite anyway.
Click to expand...
Yep. They literally ignored the impact of interest rates on fixed asset valuations.
 
ll74 said:
Dodd Frank was an incredible amount of regulation and for the most part did what it was intended to do....protect consumers from risky banking practices. Anyone who voted to repeal parts of it should be raked over the coals electorally.
Click to expand...
Doesn’t answer the question.
 
HisArpy said:
The KEY cause of the bank's failure was the poor decision making of the bank's board of directors. That they were legally allowed to make those poor decisions is in no way the fault of anyone else. They, like everyone else, are all solely responsible for the things they did.

But you fuckwits just have to blame Trump for it out of bitter spite anyway.
Click to expand...
Are you trying to tell us that if an asteroid hits the planet its not Trump's fault after all? That changes everything.
 
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