Biden will try to tighten regulations on banks holding up to $250 billion in deposits that were deregulated under Trump in the wake of Silicon Valley’s bust
- Biden pushes for new banking regulations
- “It’s not over yet,” he said Tuesday
- Expected to push for higher capital requirements, more cash on hand
President Joe Biden will push for new banking regulations in the wake of the collapse of Silicon Valley Bank as Congress probes federal officials as part of its investigation into how the financial giant went bankrupt.
The exact details of what Biden will propose is unclear, The Washington Post reported, but the administration will try to restore rules to banks with between $100 billion and $250 billion that were deregulated by Congress and the Federal Reserve during Donald Trump’s administration.
That could mean higher capital requirements for the banks and require them to have more readily available cash.
President Joe Biden will push for new banking rules after the collapse of Silicon Valley Bank
Biden hinted Tuesday that his administration had more to say about the collapse of SVB and Signature Bank, which led to the government holding back billions in uninsured deposits as they passed the $250,000 limit.
The president said his response to the crisis was “not over yet.”
“We did what we had to do, executively. I have every confidence that things will work out. The markets seem to be responding,” Biden said.
Asked if his administration had exhausted its unilateral moves barring congressional action, Biden said, “No, it’s not over. We’re watching very closely. I think my team has handled it really well so far. And instead of getting ahead of things, I think: let’s leave things as they are.’
The president and his team have argued that they failed to bail out when they pulled out of two powerful and politically connected banks. The president and the Democratic National Committee returned thousands of political donations from SVB executives after the bank collapsed.
Biden has said repeatedly that taxpayers will not get on the hook for the money.
From left, Chairman Martin Gruenberg of the Federal Deposit Insurance Corporation (FDIC); Michael Barr, Vice Chairman of the Board of Governors of the Federal Reserve System and Nellie Liang, U.S. Treasury Undersecretary for Internal Finance, testify before the Senate Banking Committee on Tuesday
The cost of Silicon Valley Bank’s bankruptcy to the government’s deposit insurance fund is about $20 billion, according to government estimates
At a hearing on Capitol Hill on Tuesday, federal regulators said the collapse of the SVB was a “textbook example of mismanagement” showing that banks with more than $100 billion in assets may need stricter oversight.
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 strengthening banking regulations.
But lawmakers had their own take on the matter.
Republicans opposed the idea that stricter regulation would have prevented the bank’s bankruptcy, while Democrats argued that the recent collapses left little doubt about the need for new rules.
The cost of the SVB’s bankruptcy to the government’s deposit insurance fund is approximately $20 billion, according to government estimates.
Officials will testify again before the House Financial Services Committee on Wednesday.
Lawmakers are trying to figure out why the bank collapsed and whether federal regulators should have intervened sooner.