Last Updated: October 12, 2023
• U.S. President Joe Biden and former President Donald Trump have publicly blamed each other’s policies for the recent banking failures of Silicon Valley Bank (SVB), Signature Bank, and Silvergate Bank.
• Biden has accused Trump of rolling back regulations established via the Dodd-Frank Act during Obama’s mandate, while Trump has accused Biden of creating an “economic catastrophe” in almost every sector.
• Analysts suggest that the problem might be ignorance in the banking system due to a lack of expertise resulting from years of low-interest rates.
The recent banking crisis involving the fall of Silicon Valley Bank (SVB), Signature Bank, and Silvergate Bank has sparked a political discussion between U.S. President Joe Biden and former President Donald Trump in order to find who is responsible for the biggest bank failures since the 2008 subprime mortgage crisis.
Biden vs Trump
President Biden assigned blame on Donald Trump’s deregulation advances, claiming it was responsible for the bank failures. Similarly, Trump fired back at Biden by accusing him of creating an “economic catastrophe” in almost every sector.
However, some analysts believe that this problem might be attributed to ignorance in the banking system caused by a lack of expertise resulting from years of low-interest rates rather than any government policy or regulation change.
Andre Esteves, CEO and founder of BTG Pactual, believes that had there been more risk assessment regarding these banks beforehand then these problems could have been avoided or better handled as they arose instead of resulting in catastrophic failure as seen now with SVB and others like it.
In conclusion, while both Biden and Trump are pointing fingers at each other for what happened to these banks, according to some analysts there may be a different underlying cause which needs further investigation if we are to prevent similar situations occurring again in future with other financial institutions.