The recent bank failures involving the fall of Silicon Valley Bank (SVB), Signature Bank and Silvergate Bank have high-profile government insiders trying to find a culprit. US President Joe Biden and former President Donald Trump publicly blamed each other’s policies for the outcome, but some analysts say the problem could be ignorance in the banking system.
Biden and Trump fight over the causes of bank failures
The recent banking crisis that the US is currently going through after the fall of three medium-sized banks (Silicon Valley Bank, Signature Bank and Silvergate Bank), has sparked a political discussion between the US president, Joe Biden, and the former president Donald Trump in order to find the person responsible for the biggest bank failures since the 2008 subprime mortgage crisis.
Biden and Trump have been very vocal in blaming each other’s policies. On March 13, after the fall of Silicon Valley Bank, Biden reassured people that the incident was isolated, called on Americans to trust the banking system, and said it was safe.
At the same time, President Biden blamed the bank failures on advances in deregulation that occurred under the Trump administration, which repealed the tougher banking regulations established through the Dodd-Frank Act during Trump’s tenure. former president Obama. Biden fixed:
Unfortunately, the last administration repealed the regulations.
Trump was quick to deny these accusations, making it clear that he believes the current administration is responsible for the current unstable state of the banking system. As part of a speech delivered on March 28, Trump fixed:
We are seeing bank failures left and right. Biden and his enablers and Congress are directly responsible for creating this economic catastrophe. And with Joe Biden at the wheel, it will only get worse. That is what is happening in almost all sectors.
a different answer
However, for some analysts, the blame lies with problems that could have been easily fixed by risk-assessing, say, Silicon Valley Bank. This is the opinion of Andre Esteves, the millionaire CEO and founder of BTG Pactual, one of the largest investment banks in Latam, which manages more than $70 billion in assets.
For Esteves, it was the inexperience of bank operators resulting from years of low interest rates that caused the debacle at Silicon Valley Bank. Esteves explained that the current generation of traders only knows inflation and aggressive policies by the book, or in theory, and doesn’t know how to deal with them in practice.
esteves declared:
It’s very basic asset liability management that any junior analyst working at a bank in Chile or Brazil or Colombia or any other country that has a little more volatility would know.
Esteves also highlighted Credit Suisse’s fall as an isolated event that had been years in the making.
What do you think of the responsibilities of Biden, Trump and the bank operators in the face of the current banking crisis? Tell us in the comment section below.
image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
