![New Jersey Democratic Sen. Bob Menendez appeared to discard a classic liberal talking point that former President Donald Trump's rollback of certain regulations led to the current banking crisis. [Screenshot MSNBC]](https://images.dailycaller.com/image/width=960,height=411,fit=cover,f=auto/https://cdn01.dailycaller.com/wp-content/uploads/2023/03/Screenshot-2023-03-15-at-1.14.43-PM-e1678900576629.png "New Jersey Democratic Sen. Bob Menendez appeared to discard a classic liberal talking point that former President Donald Trump's rollback of certain regulations led to the current banking crisis. [Screenshot MSNBC]")
New Jersey Democratic Sen. Bob Menendez appeared to discard a classic liberal talking point — that former President Donald Trump’s rollback of certain regulations led to the current banking crisis.
Silicon Valley Bank (SVB) collapsed Friday after a bank run on deposits following the bank’s announcement that it had a $1.8 billion loss on asset sales due to rising interest rates. President Joe Biden blamed Trump.
“During the Obama-Biden administration, we put in place tough requirements on banks like Silicon Valley Bank and Signature Bank, including the Dodd-Frank law to make sure that the crisis we saw in 2008 would not happen again,” Biden said Monday. “Unfortunately, the last administration rolled back some of these requirements.” The bill, which passed the Senate in 2018 with bipartisan support, exempted several banks from the reform.
“Everybody has their eyes on Credit Suisse as well,” host Jose Diaz-Balart said. “You introduced a bill that would repeal the 2018 rollback of Dodd-Frank protections. Do you see any similarities between these bank failures and the crisis of 2008?” (RELATED: Chuck Schumer, Maxine Waters Return Political Donations Linked To Silicon Valley Bank)
“They are not quite the same, for sure, I voted against the repeal in 2018 that gave regulators greater oversight over banks like these two that failed. I thought it was taking away, you know, critical elements of prudential standards and risks that should have been reviewed by the regulators. And I think that that vote opposing the repeal of that oversight, ultimately is, you know, justified today as we see.”
“But I also have to question the regulators. You know, they still had, you know, a responsibility of oversight over these banks at the Federal Reserve. Was the Federal Reserve not looking at their balance sheets?” Menendez asked. “It seems to me that upon looking at them, there were warning signs.”
“And what was the Federal Reserve, who is raising interest rates, thinking about as it relates to banks like these and maybe others that may be affected by their rate hikes and what that means to their depositors? So, there is a lot of questions to be raised here, but I think the regulators didn’t get it right and certainly, you know, those who repealed the oversight of these banks, I think, in hindsight, they are probably saying, ‘I shouldn’t have done that.'”
Research fellow in regional economics at the Heritage Foundation EJ Antoni told the Daily Caller, “It’s unlikely that the Dodd-Frank changes would have prevented SVB’s collapse” because “the regulation dealt not with individual bank solvency but with systemic risk.”
“Stress testing by the Federal Reserve does not focus on a bank’s health, but the bank’s interconnectedness to the entire financial system. The collapse of SVB was not, and is not, a systemic risk issue,” Antoni said, adding SVB collapsed because of “unrealistically low interest rates” and “gross fiscal mismanagement.”