Progressive lawmakers are blaming the collapse of two U.S. banks over the weekend on a 2018 bill that rolled back regulations put in place after the 2008 financial crisis.
Federal regulators shut down Silicon Valley Bank on Friday, two days after the nation's 16th-largest federally insured bank announced that it needed to raise more than $2.2 billion to remain solvent, which sent its stock price plunging over 60% in 48 hours. On Sunday evening, they also announced the closure of Signature Bank while revealing plans to make customers of both financial institutions whole. The Silicon Valley Bank failure is the second-largest in U.S.
"Had Congress and the Federal Reserve not rolled back the stricter oversight, SVB and Signature would have been subject to stronger liquidity and capital requirements to withstand financial shocks. They would have been required to conduct regular stress tests to expose their vulnerabilities and shore up their businesses," she wrote."But because those requirements were repealed, when an old-fashioned bank run hit S.V.B.
The Vermont senator then quoted a 2018 Congressional Budget Office report predicting that the bill would"increase the likelihood that a large financial firm with assets of between $100 billion and $250 billion would fail."Rep. Alexandria Ocasio-Cortez echoed Sanders's and Warren's sentiments, tweeting Saturday:"The regulators were there until SVB lobbied Congress to remove the guardrails that prevent this kind of crisis in the first place. Warnings were everywhere.
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