Donald Trump accused of being ‘to blame’ for Silicon Valley Bank collapse

There were many disastrous moments during former US President Donald Trump’s time in the Oval Office, but now it seems his administration may have played a part in the collapse of the Silicon Valley Bank (SVB).

Last month the UK government and Bank of England were forced to step in and facilitate a sale of the British arm of SVB to HSBC, after the American fintech bank crashed when it revealed it had lost around $1.8 billion from investors, spooking those who deposited funds into the bank to take out $42 billion in a ‘bank run’.

Now, the Federal Reserve System – the US’s central banking system – has published a report on what it branded a “textbook case of mismanagement” by SVB, citing lax government supervision as one of the reasons for its failure.

The report also states: “While higher supervisory and regulatory requirements may not have prevented the firm’s failure, they would likely have bolstered the resilience of Silicon Valley Bank.”

If only Trump hadn’t signed into law legislation which raised the threshold at which banks are considered systemically risky and therefore subject to stricter oversight back in 2018…

The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in 2010 in the wake of the 2008 financial crisis, set the limit for oversight at $50 billion, but this was raised by the 2018 law to $250 billion.

Sign up to our free Indy100 weekly newsletter

To put it another way, Democrat Elizabeth Warren said in March that the 2018 changes “permitted the banks to take on more risks in order to boost their profits”.

“So what did they do? They took on more risks, boosted their profits, gave their executive big bonuses, and then blew the banks up,” she said.

And now, following the report, many are pointing the finger of blame at Trump:

Trump being reckless with deregulation when in power? Ironically, we can bank on that.

Have your say in our news democracy. Click the upvote icon at the top of the page to help raise this article through the indy100 rankings.