U.S. politicians are confronting each other over responsibility and countermeasures for the collapse of Silicon Valley Bank (SVB).<\/p>\n
While Republicans who favor ‘small government’ oppose government intervention such as bailouts, Democrats are arguing that the government should act to protect depositors and strengthen financial supervision to prevent similar situations.<\/p>\n
According to foreign media such as the Wall Street Journal (WSJ) on the 12th, Republican Nikki Haley, former US ambassador to the United Nations, who declared running for president, made a statement and argued that “taxpayers should never bail out SVB.”<\/p>\n
Former Ambassador Haley said, “Individual investors can buy banks and assets. There is no responsibility for American taxpayers to intervene. We must end the era of big government and corporate bailouts.”<\/p>\n
Entrepreneur Vivek Ramaswamy, who also entered the race for the Republican primary, said in an interview with CNN that day that SVB made poor management decisions, saying, “I don’t think we should compensate for such bad behavior or management.”<\/p>\n
He argued that the government should not insure deposits that exceed the $250,000 limit set by the Federal Deposit Insurance Corporation (FDIC).<\/p>\n
There were also voices criticizing the regulators.<\/p>\n
Florida Gov. Ron DeSantis of the same party blamed regulators in a Fox News interview, saying, “We have a huge body of federal bureaucrats, but they never show up when we need them to stop this from happening.”<\/p>\n
In the Democratic Party, mixed reactions are detected.<\/p>\n
Rep. Lo Cana (Democratic) of Northern California, where SVB is headquartered, argued in an interview on CBS’ ‘Face the Nation’ that day that the government should protect all depositors’ deposits in principle.<\/p>\n
He stressed that there is a precedent in which the Treasury Department guaranteed all deposits at the Bank of New England in 1991, when Fed Chairman Jerome Powell was at the Treasury Department.<\/p>\n
He also argued that the Treasury Department and the FDIC should support liquidity, saying that SVB has sufficient assets, but liquidity has been insufficient due to the Fed’s rapid rate hike.<\/p>\n
Democrats Congressman Eric Swalwell (California) and Congressman Rubin Gayego also argued on Twitter that the FDIC must also insure amounts exceeding $250,000.<\/p>\n
Meanwhile, Democratic Senator Robert Menendez of the Senate Banking Committee said in an NBC interview that he did not support the bailout.<\/p>\n
Some argue that the situation happened because the Republicans eased financial regulations, and that government supervision over banks should be strengthened.<\/p>\n
“The collapse of the SVB demonstrates the need for strong regulation to protect the financial system,” Senator Elizabeth Warren, a Democrat, tweeted.<\/p>\n
The FDIC, currently designated as SVB’s bankruptcy trustee, is looking for a company to acquire the bank’s assets, and this is being discussed as a best-case scenario.<\/p>\n
If the sale of assets does not go smoothly, there is a way for the government to guarantee deposits that exceed the guarantee limit, but the WSJ predicted that such a plan would not be easy in a state where the political world is extremely divided.<\/p>\n","protected":false},"excerpt":{"rendered":"