Bank Collapse Quickly Becomes Political

GOP contenders weigh in as Biden praises his administration's response
By John Johnson,  Newser Staff
Posted Mar 13, 2023 2:09 PM CDT
Bank Collapse Quickly Becomes Political
Customers and bystanders form a line outside a Silicon Valley Bank branch location, Monday, March 13, 2023, in Wellesley, Mass.   (AP Photo/Steven Senne)

The collapse of Silicon Valley Bank and another large bank has quickly become a political issue, with 2024 GOP contenders, or presumed contenders, weighing in and casting blame. CNBC rounds some up, including an all-caps slam from former President Trump.

  • Trump: "We will have a Great Depression far bigger and more powerful than that of 1929," the former president wrote (in all caps) on Truth Social. As proof, the banks are already starting to collapse." A Trump spokesman also told Fox News that "Biden has presided over a catastrophic economy" made worse by "anti-America policies."
  • A counter: Bernie Sanders, on the other hand, blames the collapse of SVP on Trump-era deregulation, reports Insider. "Let's be clear. The failure of Silicon Valley Bank is a direct result of an absurd 2018 bank deregulation bill signed by Donald Trump that I strongly opposed," Sanders wrote on Sunday. He's referring to a law seen as a rollback of Dodd-Frank regulations on the banking industry.

  • DeSantis: The Florida governor struck a tone consistent with his "anti-woke" agenda. “This bank, they’re so concerned with DEI and politics and all kinds of stuff, I think that really diverted from them focusing on their core mission,” DeSantis told Fox. DEI refers to diversity, equality, and inclusion initiatives.
  • Haley: Nikki Haley weighed in Saturday night, declaring that "taxpayers should absolutely not bail out Silicon Valley Bank" and adding, "The era of big government and corporate bailouts must end." Federal regulators have since taken "extraordinary" measures to guarantee the money of depositors, but they say it's not a "bailout" and that the money will come not from taxpayer but from fees banks pay to the FDIC.
  • Ramaswamy: Entrepreneur and new 2024 entrant Vivek Ramaswamy said the government should “let SVB fully fail” without protecting the money of depositors. He blamed bank policies and tech startups for the SVB collapse, adding, "It's not the U.S. taxpayer's job to now coddle them."
  • Biden: On Monday, he credited his administration for a fast response and stressed that taxpayers will not pay for the rescue. “Thanks to the quick action of my administration over the past few days, Americans can have confidence that the banking system is safe," Biden said, per NBC News. "Your deposits will be there when you need them."
  • Capitol Hill: Expect the issue to be a major topic in the coming days and weeks, per the Hill. Lawmakers were briefed in advance of Biden's statement Sunday night, and while Democrats praised it, Republicans including Sen. Bill Hagerty of Tennessee accused the administration of rejecting potential buyers of SVB and "instead turned the Fed & Treasury into an even bigger safety net."
(More Silicon Valley Bank stories.)

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