Democratic Architect of Dobbs-Frank Shoots Down Claims Trump Caused Banking Collapse
Everything is Donald Trump’s fault.
The war in Ukraine, the toxic train derailment in Ohio, the officiating in Super Bowl LVII — everything! It’s all Donald Trump’s fault.
And the recent bank failures — the former president caused that, too, by endorsing the loosening of banking regulations enacted by the 2010 Dodd-Frank Act, according to Democratic Sen. Elizabeth Warren of Massachusetts.
Not so fast, says former Rep. Barney Frank.
Yeah, that Barney Frank – the Massachusetts Democrat whose name is in Dodd-Frank as one of its key sponsors, alongside that of former Democratic Sen. Chris Dodd of Connecticut.
If anybody should be pointing a finger at Trump, it should be Frank. After all, he’s on the board of one of the failed financial institutions — Signature Bank — and it would seem to be in his interest to put the blame somewhere else.
But Frank is being frank (sorry) and describing where the bank erred.
He told Politico that Signature’s problems stem from its being one of the few banks actively involved in cryptocurrency. Last year’s cryptocurrency collapse caused a panic that turned into a run following the failure of Silicon Valley Bank late last week, Frank said.
The former Democratic congressman said the easing of banking regulations during the Trump era had nothing to do with the recent bank failures.
Warren sees it differently.
“They should have to meet higher capital standards,” the senator told Politico. “They should be subject to stress tests and they should have regular supervision that would catch exactly the kind of mistake that SVB made, mistakes about the failure to hedge risk and mistakes about concentrating in one industry.”
And in a New York Times Op-Ed on Monday, Warren wrote: “In 2018, the big banks won. With support from both parties, President Donald Trump signed a law to roll back critical parts of Dodd-Frank regulations.”
Note that Warren had to acknowledge “both parties” were involved in altering banking regulations, a change with which Frank indicated he essentially had no problem.
“I don’t think that had any impact,” he told Politico. “They hadn’t stopped examining banks.”
Meanwhile, President Joe Biden, in a brief banking speech Monday, was more direct in criticizing Trump.
“During the Obama-Biden administration, we put in place tough requirements on banks like Silicon Valley Bank and Signature Bank, including the Dodd-Frank Law, to make sure the crisis we saw in 2008 would not happen again,” Biden said.
“Unfortunately, the last administration rolled back some of these requirements,” the president said. “I’m going to ask Congress and the banking regulators to strengthen the rules for banks to make it less likely that this kind of bank failure will happen again and to protect American jobs and small businesses.”
As the blame game continues, it’s interesting to look at some of the inner workings of Silicon Valley Bank.
Given the current mess, the financial statements might be upsetting to read. On the other hand, you might go to this link and reflect on the bank’s proud commitments to “diversity, equity and inclusion” in a January report.
Its finances were aflame but its virtue remained intact as SVB purred about its “DEI metrics dashboards to advance accountability and representation” and its 2023 goal of having every single employee undergo DEI education.
Given stories about such education sessions, employees might have preferred the bank provide them with free root canals.
The DEI document even touted a goal of “partnership with [our] client base to support their DEI objectives and growth.”
Your banker is going to partner with you to meet “diversity, equity and inclusion” objectives? That’s chilling.
But enough of that. SVB has other concerns now. And Signature Bank has its issues, too.
And it’s not Trump’s fault.
The SVB collapse is explained in detail in an exclusive report for The Western Journal’s subscribers: “The Everyman’s Guide to SVB’s Fall.” Consider subscribing to The Western Journal to read content like this and to help us combat Big Tech’s attempts to demonetize us.
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