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Accounts at Silicon Valley Bank over $250,000 will be made whole. That is a bailout since the FDIC only insured them for $250,000. Whether there will be an influx of taxpayer dollars or some sort of monetary and fiscal shenanigans is another matter.
Silicon Valley Bank received a bailout.
The “geniuses” who run our economy, the titans of finance, do what they do best. They gamble our money. They sneer at regulations that protect the taxpayers from their ineptitude and faux-libertarian stance. They ultimately fail because our private finance sector is nothing but a deck of cards that ultimately falls. And then they beg for a bailout.
One must remember that Silicon Valley Bank lobbied Congress to remove banks of around their size from the type of stress testing major banks must go through. Trump signed the law. Now the bank has failed after making investments that are expected of these titans of finance. We must remember that our financial sector is a gambling casino largely devoid of intellect.
Newsweek reported on the debacle, adding,
While largely unknown outside California’s Silicon Valley tech corridor, SVB has for decades been a go-to financial institution for the country’s technology and health start-ups. One of the 20 biggest banks in the United States, it had over $200 billion in assets by the end of last year, according to CNN.
As of Friday, however, SVB was left in freefall as clients began a run on the institution, spurred on by higher interest rates and other factors, resulting in a spiraling chain reaction that has threatened to sink the institution and leave its customers in financial jeopardy.
In the fallout of Friday’s run on the bank, some reports noted that a rollback of banking regulations by former President Donald Trump might have weakened SVB’s ability to manage risks associated with interest rates. In 2018, according to The New York Times, Trump signed a bill that axed regulatory requirements for regional banks with less than $250 billion in assets.
Under the new rules, such institutions no longer had to submit to “stress testing” by the Federal Reserve and were no longer required to keep a certain amount of cash on hand to protect against the effects of financial shocks, the newspaper reported.
In the fallout of Friday’s run on the bank, some reports noted that a rollback of banking regulations by former President Donald Trump might have weakened SVB’s ability to manage risks associated with interest rates. In 2018, according to The New York Times, Trump signed a bill that axed regulatory requirements for regional banks with less than $250 billion in assets.
If you want to understand the callousness and disregard of these executives, note that on Friday, the day of the bank’s collapse, they all got bonuses. These crooks knew their bank was in trouble. Why is anybody getting a bonus?
The government came to rescue millionaires’ and billionaires’ deposits. But they cannot fight to rescue those fraught with $10,000 of student debt. Will the middle class, who are constantly ripped off by these thugs in ties, continue to twist their minds in pretzels to defend these guys as they continue to sell Americans a false dream?
I agree that the Biden administration had to do what it did. But we need to be straight with Americans so that we understand why banks must be heavily regulated at the minimum. When the banks screw up, they act as if they are nationalized. When they are making dubious profits, they want government out of their business. The solution is simple. We should nationalize every failed bank.
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