US Senator Bernie Sanders blamed former President Donald Trump for the collapse of Silicon Valley Bank SVB.
Sanders made the announcement on Sunday. “Let’s be clear… the collapse of the Silicon Valley bank is a direct result of Donald Trump’s ridiculous 2018 banking liberalization bill, which I strongly opposed.”
Sanders was referring to the Growth, Regulatory Assistance and Consumer Protection Act, which former President Donald Trump signed into law in May 2018.
The bill was seen as a significant departure from the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Sanders said in a statement that the Trump administration ignored all the lessons it should have learned from the Wall Street crash of 2008 and the Enron scandal.
He continued by saying, “Now is not the time for American taxpayers to bail out a Silicon Valley bank … If the bank is to be bailed out, it must be 100% funded by Wall Street and major financial institutions.”
“Let’s muster up the courage to stand up to Wall Street and repeal the disastrous Banking Deregulation Act of 2018,” he added.
In signing the bill, Trump commented on previous banking reforms, saying those previous laws were useless in a time of crisis.
Trump also said at the time that the Dodd-Frank rules were “crushing local banks and credit unions across the country.”
The law freed small banks from strict regulations and eased rules for large banks, and increased the asset limit for “essential financial institutions” from $50 billion to $250 billion.
This meant that SVB, which ended 2022 with around $209 billion in assets, was no longer classified as an important financial institution and as such was not subject to the stricter rules that apply to large banks.
Source: Business Insider