Sen. Bernie Sanders blames Trump-era politics for running Silicon Valley Bank.
Sanders said the 2018 law deregulated the industry and planted the seeds for the bank’s failure.
Sanders said the 2018 law should be repealed to “break up too-big-to-fail banks.”
Sen. Bernie Sanders blamed Trump-era banking law for Silicon Valley Bank’s failure.
“Let’s be clear. The bankruptcy of Silicon Valley Bank is a direct result of the absurd 2018 bank deregulation bill signed by Donald Trump, which I strongly opposed,” Sanders it said in a statement on Sunday.
Sanders was referring to the Economic Growth, Regulatory Relief and Consumer Protection Act, which former President Donald Trump signed into law in May 2018.
The bill is seen as a significant rollback to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In signing the bill, Trump commented on previous banking reforms, saying “they were in such trouble. One size fits all — these rules just don’t work,” according to The Washington Post.
At the time, Trump also said the Dodd-Frank regulations were “crushing community banks and credit unions across the country.”
Signing the bill meant that Trump was exempting smaller banks from strict regulations and loosening the rules that big banks must follow. The law raised the asset threshold for “systemically important financial institutions” from $50 billion to $250 billion.
That meant Silicon Valley Bank — which ended 2022 with $209 billion in assets — was no longer designated as a systemically important financial institution. As such, it was not subject to the more stringent regulations that apply to larger banks.
Sanders wrote in his statement Sunday that the Trump administration has ignored all the lessons it should have learned from the 2008 Wall Street crash and the Enron scandal.
“Now is not the time for US taxpayers to bail out Silicon Valley Bank. If there is to be a bailout of Silicon Valley Bank, it must be 100 percent funded by Wall Street and major financial institutions,” he wrote.
Sanders added that the US “cannot continue down the path of more socialism for the rich and rugged individualism for everyone else.”
“Let’s have the courage to stand up to Wall Street, repeal the disastrous banking deregulation act of 2018, break up too-big-to-fail banks, and address the needs of working families, not the risky bets of capitalists- vultures,” Sanders wrote.
For his part, Trump claimed without evidence that the Silicon Valley Bank run should be blamed on “the economy.”
“With what is happening to our economy and with the BIGGEST, STUPIDEST TAX INCREASE IN US HISTORY being proposed, TIMES TIMES, JOE BIDEN WILL GO DOWN AS THE HERBERT HOOVER OF THE MODERN ERA,” Trump wrote on Social Truth .
“WE ARE GOING TO HAVE A GREAT DEPRESSION, MUCH BIGGER AND MORE POWERFUL THAN THE ONE IN 1929,” Trump continued. “AS PROOF, THE BANKS ARE ALREADY STARTING TO FALL!!!”
A Trump spokesperson told Insider that “out-of-control Democrats and the Biden administration continue to pathetically try to blame President Trump for their failures with desperate lies, like the CCP spy balloons, the East Palestine train derailment, and now the SVB collapse .”
“This is nothing more than a sad attempt to inflame the public to avoid accountability,” the spokesperson told Insider.
The Federal Deposit Insurance Corporation closed the Silicon Valley bank on Friday after a catastrophic bank run. The collapse of Silicon Valley Bank has now become the largest US bank failure since the 2008 financial crisis.
The FDIC insures deposits up to $250,000 per depositor, per institution, per property class. However, startups with more than $250,000 in Silicon Valley Bank cash are now at risk of not being able to make payroll next week.
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