That’s why Trump is complicit in the bank earthquake

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Silicon Valley Bank and First Republic Bank have already sunk this week, Pacific Western Bank and First Horizon are on the brink. The banking tremor of US regional banks continues. Wall Street investors wonder: When will the next domino fall?

The leading US index, the Dow Jones, fell to its lowest level since March on Thursday. If things continue like this in America, other European banks may collapse after Credit Suisse. But how did this disaster happen? Who is responsible for this?

Trump softens Obama law

The US Federal Reserve asked him these questions. It has now released a report focusing on the failure of the Bank of Silicon Valley (SVB) in March. The striking result: The SVB’s demise resulted from the Trump administration’s weakening of regulation and the failures of internal regulators, who were too slow to correct mistakes made by the bank’s administration.

The statements in the report about former US President Donald Trump (76) are particularly explosive from a political point of view. A few weeks after taking office, the bank set about diluting one of the most effective laws passed by his predecessor, Barack Obama (61), since the financial crisis, to protect its customers.

As a result of the Obama administration’s law, US regional banks are subject to the same scrutiny as major Wall Street banks. Obama wanted to prevent the state from having to bail out sick financial institutions. The American version of the “too big to fail” law in Switzerland, so to speak.

Democrats are complicit

The Trump administration has circumvented deregulations in Congress. But with the active support of Democrats close to Wall Street, as the Wall Street Journal wrote in 2018. Politicians on the left wing of the party, such as Senator Elizabeth Warren (73), who lost to Joe Biden (80) in the party’s internal primary elections for the 2020 presidential election, opposed the change in 2018.

Now he sees himself confirmed: “When Donald Trump signed into law a law repealing the rules for ‘too big’ banks like Silicon Valley Bank, I warned it would endanger our economy,” he wrote on Twitter last week. “I wish I was wrong. But these recent bank failures are the direct result of weaker rules.”

The former president’s son, Donald Trump Junior (45), defended himself against Warren’s statements. “I don’t remember banks failing under Trump,” he said. “It’s only a matter of time before Biden and the media blame him for that too.”

Source :Blick