Senator Elizabeth Warren (D-MA) Monday on MSNBC’s “The Rachel Maddow Show” claimed it was former President Donald Trump’s “bank regulation reliefs” that needed to be rolled back to protect against more banks collapsing like Silicon Valley Bank last week.
Warren said, “The way to understand this crisis is that it has three players. The first is Congress and President Trump, who says, let’s weaken the regulation, which hit really hard. The second part is the regulators themselves and, in particular, the Fed and Jerome Powell, the chairman of the Federal Reserve Bank, who took that change in the laws and he ran with it. In fact, he ran further than a lot of people even though the law let him. In tailoring the oversight of those banks in order to make it as weak as possible.”
She continued, “Part three, which is those executives, those bank CEOs who lobbied hard to get this change in law. Those are the ones who, when the window opened, they were ready to go. They went out, and they decided to load up on risk. Why? They loaded up on risk because it made their banks more profitable, and it meant it made them have higher salaries. They got to rule over bigger banks. They got big bonuses. They brought in their friends and did all that by taking on more risk. It worked. SVB increased its profitability of the last three years by 40%. They took on all of the risks and make themselves more profitable right up to the day that the bank exploded. That is the story.”
Warren added, “Congress needs to act. Congress needs to roll back the Trump bank regulation reliefs. We need to make a change because it will affect the regulators, and the regulators will make sure that they are engaging in closer supervision.”
Follow Pam Key on Twitter @pamkeyNEN