Blame Game Begins in Silicon Valley Bank Collapse
Some politicians and media figures sought to place blame after Silicon Valley Bank became the second-largest bank to fail in U.S. history.
Blaming Loose Rules: Some voices noted that SVB was one of several small and mid-size banks which lobbied to exempt themselves from the 2010 Dodd-Frank Act’s regulations. Those rules were rolled back in a 2018 bill signed by former President Donald Trump which received support from 17 Democratic senators and 50 Republican senators. On Monday, Sen. Elizabeth Warren (D-MA) argued in The New York Times (Opinion rated Left) that SVB’s failure was “the direct result of leaders in Washington weakening the financial rules.”
Blaming ESG: Some conservatives, like Home Depot cofounder Bernie Marcus, pointed to SVB’s so-called “woke” policies. The New York Post (Lean Right bias) published a report on an SVB executive who worked on LGBTQ+ outreach, appearing to draw a connection between inclusivity efforts and the bank’s failure.
Blaming Financiers: Those connected to the issue had their own ideas about whom to blame. A financial trader told CNBC (Center bias) on Monday that SVB’s “greed and avarice” were at fault. Some in the industry blamed SVB’s executives, and others accused venture capitalists of egging on SVB’s bad practices. Some also blamed the Federal Reserve’s interest rate hikes.
How the Media Covered It: Perspectives were polarized; coverage discussing Dodd-Frank regulations was more common on the center-left, and coverage of those blaming “woke” policies was more common on the right. A Fox News (Right bias) report disputed those blaming Trump by calling the 2018 rule rollback “bipartisan.”
Featured Coverage of this Story
From the CenterSilicon Valley’s ‘greed and avarice’ have ‘finally come home to roost’ in SVB collapse, trader says
The fallout from the shuttering of Silicon Valley Bank — the second-largest bank collapse in U.S. history — continued Monday, dragging down international banking stocks.
European banking stocks were down 6.3% at 12:40 p.m. London time on Monday, after closing 4% lower on Friday, as U.S. financial regulators shut down SVB and took control of its deposits. All major U.S. indexes closed at least 4% lower on the week Friday amid the SVB panic, while regulators shut down Signature Bank — one of the cryptocurrency industry’s main lenders — on Sunday, citing systemic risks.
From the LeftBarney Frank blames crypto panic for his bank’s collapse. Elizabeth Warren blames Trump.
Former Rep. Barney Frank and Sen. Elizabeth Warren — two key architects of the post-2008 system of Wall Street regulation — are at odds over what’s dragging down banks once again.
Frank, who chaired the House Financial Services Committee in the wake of the global financial crisis and wrote sweeping new rules enacted in 2010, most recently served on the board of New York’s Signature Bank, which regulators shut down Sunday.
From his front-row seat, he blames Signature’s failure on a panic that began with last year’s cryptocurrency collapse — his bank...
From the RightSVB collapse: Republicans claim 'woke' policies led to tech bank's downfall
A growing chorus of Republicans is placing fault for Silicon Valley Bank's collapse on "woke" investments and policies at the company.
The bank's downfall, which was in large part precipitated by the company's heavy investment in Treasury bonds that lost value as a result of the Federal Reserve's rate hikes, prompted the Biden administration to step in and backstop its deposits, which some decried as a de facto "bailout," but grumblings over the company's social justice agenda were particularly pronounced on the Right.
June 5th, 2023
June 5th, 2023
June 2nd, 2023
Discuss & Debate economy and jobs
Civic Synergy Leadership ProgramJune 07 at 4pm PT / 7pm ET Civic Synergy