Donald Trump, the former president, blamed ‘wokeness’ on Monday rather than the law he signed in 2018 that eliminated the Dodd-Frank federal rules on smaller banks for the failure of Silicon Valley Bank.
Within days of taking office, Trump boasted that he would repeal the Dodd-Frank Act, which was passed in 2010 following the 2008 financial crisis and required banks to be more cautious when investing the money of their depositors, President Barack Obama signed the Act.
“Dodd-Frank is a disaster. We’re going to be doing a big number on Dodd-Frank,” Trump said on Jan. 30, 2017, he was also signing an executive order that required agencies to repeal two regulations for every new regulation they intended to enact.
Donald Trump has been blaming corporate ‘wokeness’ lately despite this. Trump emphasized posts on Sunday and Monday that claimed SVB’s diversity and environmental programs were to blame for the bank’s demise.
Trump defended the 2018 deregulation law on Monday, saying that restrictions were eating alive the banks. He claimed that the current issue was the Federal Reserve’s rising interest rates.
But, it doesn’t seem as though the majority of banks were impacted by the interest rate increases because they were hedged using recognized techniques that lessen risk at the expense of revenues.
When asked if Trump should bear responsibility for the bank’s failure as a result of the 2018 legislation he signed, Trump campaign spokeswoman Steven Cheung blamed Democratic President Joseph Biden.
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Donald Trump Warns About Silicon Valley Bank Collapse
On Sunday, Trump posted on his social media site Truth Social about the demise of SVB. He attributed the situation to President Joe Biden’s economic policies and forewarned of impending financial catastrophes.
A few hours after his post on Truth Social, Trump’s communications staff also released a statement in which they reiterated their contention that Democratic policies were to blame for the collapse.
Several have argued since the collapse on Friday that it was a longer-term effect of a law Trump signed in 2018 that lowered restrictions for mid-level and regional banks, like SVB.
The measure increased the previous cap of $50 billion in assets, which was imposed in the wake of the Great Recession, to allow banks with assets of over $250 billion to evade the Federal Reserve’s mandated oversight that kept a check on their stability. Several people in the financial industry, notably Greg Becker, CEO of SVB, advocated for the revisions.
Several financial experts, as well as congressional Democrats including Alexandria Ocasio-Cortez and Katie Porter, who stated she is working on legislation to overturn Trump’s 2018 bill, echoed the claims regarding Trump’s deregulations. Cheung’s declaration was made directly in answer to a question regarding those allegations.
