Posted on 03/14/2023 8:30:00 AM PDT by SoConPubbie
Senator Elizabeth Warren (D-MA) Monday on MSNBC’s “The Rachel Maddow Show” claimed it was former President Donald Trump’s “bank regulation reliefs” that needed to be rolled back to protect against more banks collapsing like Silicon Valley Bank last week.
Warren said, “The way to understand this crisis is that it has three players. The first is Congress and President Trump, who says, let’s weaken the regulation, which hit really hard. The second part is the regulators themselves and, in particular, the Fed and Jerome Powell, the chairman of the Federal Reserve Bank, who took that change in the laws and he ran with it. In fact, he ran further than a lot of people even though the law let him. In tailoring the oversight of those banks in order to make it as weak as possible.”
She continued, “Part three, which is those executives, those bank CEOs who lobbied hard to get this change in law. Those are the ones who, when the window opened, they were ready to go. They went out, and they decided to load up on risk. Why? They loaded up on risk because it made their banks more profitable, and it meant it made them have higher salaries. They got to rule over bigger banks. They got big bonuses. They brought in their friends and did all that by taking on more risk. It worked. SVB increased its profitability of the last three years by 40%. They took on all of the risks and make themselves more profitable right up to the day that the bank exploded. That is the story.”
Warren added, “Congress needs to act. Congress needs to roll back the Trump bank regulation reliefs. We need to make a change because it will affect the regulators, and the regulators will make
(Excerpt) Read more at breitbart.com ...
If you look at the regulations that apply to large banks, they concentrate on capital adequacy. The severe stress test is 10% unemployment, near 0% interest rates, and a 50% downturn in the stock market.
Would SVB passed the capital adequacy test and the stress test? Probably yes - they had a lot of capital in ultra-safe treasuries.
The problem comes up with the opposite case - what if unemployment falls to 0% and interest rates are 10%? They’re not stress-testing that!
Fauxcahontas, the Buffalo Wing Woman, speak with forked tongue again. Somebody give her a beer.
Gray Beaver speak’um out a@@.
A habitual liar, just like Biden. She’ll say ANYTHING to pander to her delusional base.
Warren is an idiot. If the bank examiners had been doing their job, they would have put the bank under a restrictive agreement for their balance sheet mismanagement.
The problem was due to woke investing. Banks also suffer from regulations redirecting loans to blacks with bad credit and neighborhoods on the decline.
Rather than losing sleep this weekend trying to solve a huge banking crisis, Democrats put their time, effort, and energy only into how to spin it.
There is no connection to reality any more. In their minds it is impossible for liberalism to fail, all evidence to the contrary. It’s complete psychosis.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.