Biden to impose new banking rules after Silicon Valley Bank collapse as Congress questions federal officials on how giant firm went bankrupt
- Biden wants to push for new banking regulations
- “It’s not over yet,” he said on Tuesday.
- Should push for higher capital requirements, more cash available
President Joe Biden will push for new banking regulations in the wake of the Silicon Valley Bank collapse as Congress grills federal officials as part of its investigation into how the financial giant went bankrupt.
Exact details of what Biden will propose are unclear, the Washington Post reported, but the administration will try to reinstate rules for banks with between $100 billion and $250 billion that have been deregulated by Congress and the Federal Reserve. under the Donald Trump administration.
This could include higher capital requirements for banks and requiring them to have larger reserves of cash immediately available.
President Joe Biden to push for new banking regulations after Silicon Valley Bank collapse
Biden hinted Tuesday that his administration had more to say about the collapse of SVB and Signature Bank that led the administration to back billions in uninsured deposits for exceeding the $250,000 limit.
The president said his response to the crisis was “not over yet”.
“We did what we had to do at the executive level. I’m sure things are working out. The markets seem to be reacting,” Biden said.
Asked if his administration has exhausted its unilateral measures, barring congressional action, Biden replied, “No, it’s not over yet.” We are watching very closely. I think my team has handled the situation very well so far. And rather than getting ahead here, I think let’s just let things evolve as they are.
The president and his team argued they failed to bailout when they relied on two powerful and politically connected banks. The president and the Democratic National Committee returned thousands of political donations to SVB leaders after the bank’s collapse.
Biden has repeatedly said taxpayers will not be responsible for the money.
From left to right, Martin Gruenberg, Chairman of the Federal Deposit Insurance Corporation (FDIC); Michael Barr, vice chairman for oversight of the Board of Governors of the Federal Reserve System and Nellie Liang, undersecretary for internal finance at the U.S. Treasury Department, testify before the Senate Banking Committee on Tuesday
The cost of Silicon Valley Bank’s failure to the government’s Deposit Insurance Fund is around $20 billion, according to government estimates
At a hearing on Capitol Hill on Tuesday, federal regulators said SVB’s collapse was a “classic case of mismanagement” that shows banks with more than $100 billion in assets may need help. stricter supervision.
They also recommended that the government review the federal insurance program that protects deposits.
In testimony before the Senate Banking Committee, officials from the Federal Reserve, the Treasury Department and the Federal Deposit Insurance Corporation said they would support tighter banking regulations.
But lawmakers had their own opinions on the matter.
Republicans pushed back on the idea that tighter regulations would have prevented the bank from failing, while Democrats argued that recent meltdowns left little doubt that new rules were needed.
The cost of SVB’s failure to the government’s Deposit Insurance Fund is around $20 billion, according to government estimates.
The officials will testify again on Wednesday before the House Financial Services Committee.
Lawmakers are trying to determine why the bank collapsed and whether federal regulators should have intervened sooner.