Staff Reports
The failure of Silicon Valley Bank (SVB) has generated discussions among Republican candidates and potential nominees for the 2024 elections. They have expressed their opinions on the reasons behind the bank's collapse and the appropriate government response. Several individuals, including businessman Vivek Ramaswamy, former South Carolina Governor Nikki Haley, former President Donald Trump, and Florida Governor Ron DeSantis, have criticized government bailouts and suggested that the bank's emphasis on DEI and ESG initiatives could have contributed to its downfall.
Maria Bartiromo breaks down the Silicon Valley Bank collapse with Speaker McCarthy, Gov Ron DeSantis https://t.co/LvyMKEqSHa
— Fox News (@FoxNews) March 12, 2023
SVB was placed under the control of the Federal Deposit Insurance Corporation (FDIC) when it was shut down on Friday after its shares plummeted due to widespread withdrawals. As almost 90% of SVB's depositors are not insured, Ramaswamy has recommended that the government should not provide a bailout, but rather permit other banks to acquire it. Furthermore, he has suggested that the FDIC should increase its coverage from $250,000 to $10 million.
For comic relief, here’s a list of “cross-function working groups” from SVB’s 2022 ESG report:
– Sustainable Finance Group: Develops strategy and monitors progress against SVB’s Climate Commitment
• Investments Group: Reviews updates from our businesses on sustainability and…— Vivek Ramaswamy (@VivekGRamaswamy) March 12, 2023
‘Corporate Bailouts Must End’: 2024 GOP Candidates Weigh In On Silicon Valley Bank’s Collapse https://t.co/6BSVW8jR8t
— US Burning (@UsBurning) March 13, 2023
Haley also spoke out against government bailouts, saying “Silicon Valley Bank should not be saved by taxpayers under any circumstances. Bank assets can be bought by private investors. It's not the taxpayers' job to help. The time of big government and bailing out businesses must be over.”
According to former President Trump, President Joe Biden's economic policies are responsible for the SVB's collapse. He cites Biden's proposed tax hikes, which he calls the "biggest and dumbest" in history, multiplied by five as evidence. Meanwhile, Governor DeSantis expressed disappointment that the federal bureaucracies did not take any action to prevent the bank's closure.
It is evident that Silicon Valley Bank's collapse was a result of its mismanagement and inadequate financial prudence. The bank's emphasis on DEI and ESG initiatives distracted it from its primary objective, and it disregarded interest rate risks while handling its customers. It is not the responsibility of American taxpayers to support and rescue the bank since this could encourage further imprudent conduct among financial institutions in the future.
The FDIC has relocated SVB's insured deposits to the Deposit Insurance National Bank of Santa Clara (DINB), which will take over SVB's banking operations on Monday. This event is a significant illustration of why government bailouts are not only needless but also harmful to our economy. Private investors should be authorized to buy the bank and its assets instead of taxpayers.
The era of big government bailouts must end, and conservative Republicans are leading the charge against them. It is time for banks to take responsibility for their own actions and be held accountable for their mistakes, not have taxpayers foot the bill for their irresponsibility.
