Bank Failures: Is the Blame Game Between Biden and Trump Missing the Real Point?
Recent bank failures that have led to the collapse of Silicon Valley Bank (SVB), Signature Bank, and Silvergate Bank have prompted high-profile government officials to try to find those responsible.
US President Joe Biden and former President Donald Trump have publicly denounced each other’s policies for the outcome. Still, some analysts say the problem may lie in the ignorance of the banking system.
Key Takeaways
- The United States now faces a banking crisis following three medium-sized bank failures.
- It’s no secret that Biden and Trump blame each other for their policies.
- The Biden administration blamed deregulation for bank failures.
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While President Biden blames Trump’s Dodd-Frank Act for the banking crisis, Trump believes Biden is directly responsible for the current economic climate.
Biden And Trump Are At Odds Over What Caused The Bank To Collapse
The recent banking crisis that the United States is now facing following the failure of three medium-sized banks (Silicon Valley Bank, Signature Bank, and Silvergate Bank) has been driven mainly by who is between US President Joe Biden and former President Donald Trump. It has spurred a political debate to find out who is to blame. Biggest bank failure since the 2008 subprime mortgage crisis.
Biden and Trump have been very vocal about blaming each other for each other’s policies. On March 13, after the collapse of Silicon Valley Bank, Biden reassured people of the isolated nature of the incident and urged Americans to trust the banking system, saying it was safe.
At the same time, President Biden blamed the bank failures on the deregulation initiatives undertaken by the Trump administration, in which the more stringent banking laws put in place by the Dodd-Frank Act during the term of previous President Obama were overturned.
Mr. Biden Said:
Regulating was unfortunately rolled back by the previous administration.
Trump quickly refuted these claims, showing that he believes the current administration is to blame for the precarious banking system. In a speech on March 28.
Trump Said the Following:
Everywhere we look, banks are failing. This economic catastrophe was directly caused by Biden, his supporters, and Congress. And it will only get worse with Joe Biden in charge. That is what is taking place in practically every industry.
Even so, according to other analysts, the fault is with issues that might have been readily resolved by evaluating the risk of, say, Silicon Valley Bank. Andre Esteves, the billionaire CEO and founder of BTG Pactual, one of the largest investment banks in Latin America with over $70 billion in assets under management, holds this opinion.
For Estevez, the bankers’ lack of know-how due to years of low-interest rates led to Silicon Valley Bank’s failure. Estevez explained that the current generation of business owners only know inflation and restrictive policies from books and theory but must learn how to deal with them in practice.
Estevez Explained:
This is fundamental asset-liability management, something any junior analyst who works for a bank in Chile, Brazil, Colombia, or any other high-volatility country knows.
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