Biden blames bank collapses on former President Trump
Global investors are unnerved that something is up in the air. The collapse of large US banks, namely Silicon Valley Bank (SVB) and Signature Bank, is viewed as a precursor of a looming financial apocalypse. Meanwhile, the US monetary authorities are trying to reassure American depositors and searching for those who lie behind the incident.
The failure of the two leading American financial institutions agitated financial markets beyond the US. Market participants are on the edge in the face of a new financial crisis. Negative expectations of a financial meltdown worldwide have not come true yet, though one of the oldest European banks, Credit Suisse, was also affected and required emergency rescue measures.
The US President came up with his own version of the happening, shifting the blame for the banking crisis on his predecessor Donald Trump. The US leader said Donald Trump set the stage for the crisis in the banking sector with the decision taken in 2018 to loosen banking rules enacted by Obama’s administration in the wake of the 2008 financial crisis.
“Unfortunately, the last administration rolled back regulations,” Biden lamented. The President pledged to stem the contagion, in particular, to appeal to Congress and watchdogs of the banking sector. Biden aims to retrieve the Obama-era rules to safeguard lending institutions from such crashes and to protect the labor market and small businesses in the US.
Earlier, in 2018, Donald Trump signed the bill relaxing the oversight of medium-sized banks. Silicon Valley Bank belongs to this category. Previously, all banks managing more than $50 billion in assets were subject to multiple severe audits, including annual stress tests. According to the bill enacted into law by Trump, lenders with up to $250 billion in assets became exempt from the stricter post-crisis supervision.