Senator Bernie Sanders recently hailed Donald Trump-era banking law responsible for the Silicon Valley Bank’s failure.
“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 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 was seen as a significant rollback of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. At the bill signing, Trump commented on the previous banking reforms, saying “they were in such trouble. One size fits all — those rules just don’t work,” per The Washington Post.
Trump also said at the time that the Dodd-Frank regulations were “crushing community banks and credit unions nationwide.”
Signing the bill into law meant that Trump was exempting smaller banks from stringent regulations and loosening rules that big banks had to follow. The law raised the asset threshold for “systematically important financial institutions” from $50 billion to $250 billion.
This implied that the Silicon Valley Bank — which ended 2022 with about $209 billion in assets — was no longer designated as a systematically important financial institution. As such, it was not subject to the tighter regulations that apply to bigger banks.
Sanders wrote in his Sunday statement that the Trump administration had disregarded 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 a bailout of Silicon Valley Bank, it must be 100 percent financed by Wall Street and large financial institutions,” he wrote.
Sanders added that the US “cannot continue down the road of more socialism for the rich and rugged individualism for everyone else.”
“Let us have the courage to stand up to Wall Street, repeal the disastrous 2018 bank deregulation law, break up too big to fail banks, and address the needs of working families, not the risky bets of vulture capitalists,” Sanders wrote.
For his part, Trump has claimed without substantiation that the Silicon Valley Bank run should be blamed on the “economy.”
“With what is happening to our economy, and with the proposals being made on the LARGEST AND DUMBEST TAX INCREASE IN THE HISTORY OF THE USA, TIMES FIVE, JOE BIDEN WILL GO DOWN AS THE HERBERT HOOVER OF THE MODRRN AGE,” Trump wrote on Truth Social.
“WE WILL HAVE A GREAT DEPRESSION FAR BIGGER AND MORE POWERFUL THAN THAT OF 1929,” Trump continued. “AS PROOF, THE BANKS ARE ALREADY STARTING TO COLLAPSE!!!”
A Trump spokesman told Insider that “out of control Democrats and the Biden administration have continued to pathetically try to blame President Trump for their failures with desperate lies, such as the CCP spy balloons, the train derailment in East Palestine, and now the collapse of SVB.”