Silicon Valley Bank has collapsed, and it was completely avoidable. In 2018, Donald Trump and the Republican Congress—at the behest of the banking industry—rolled back key parts of the Dodd-Frank law that protected consumers. The Dodd-Frank Act, known as the most far-reaching Wall Street reform in history, was supposed to prevent the excessive risk-taking that led to the financial crisis and create a new consumer watchdog to prevent mortgage companies and payday lenders from exploiting consumers. Big Banks would have been subject to stronger liquidity and capital requirements to withstand financial shocks. The collapse we now see could have been predicted and prevented, and consumers’ assets would have been protected.
Instead, we saw Silicon Valley Bank executives give themselves huge bonuses—hours before the federal bank regulators rushed in to take over a failing institution. They did this because, in the current financial regulatory environment, they believed that they could get away with it.
Silicon Valley Bank has collapsed, and it was completely avoidable. In 2018, Donald Trump and the Republican Congress—at the behest of the banking industry—rolled back key parts of the Dodd-Frank law that protected consumers. The Dodd-Frank Act, known as the most far-reaching Wall Street reform in history, was supposed to prevent the excessive risk-taking that led to the financial crisis and create a new consumer watchdog to prevent mortgage companies and payday lenders from exploiting consumers. Big Banks would have been subject to stronger liquidity and capital requirements to withstand financial shocks. The collapse we now see could have been predicted and prevented, and consumers’ assets would have been protected.
Instead, we saw Silicon Valley Bank executives give themselves huge bonuses—hours before the federal bank regulators rushed in to take over a failing institution. They did this because, in the current financial regulatory environment, they believed that they could get away with it.