Despite the efforts of President Joe Biden to turn the situation around following the collapse of the Silicon Valley Bank, he will likely face opposition from Republicans.
During his last week in office, the president called for the reinstatement of regulations that were withdrawn five years ago. He also demanded harsher punishments for executives who fail to prevent financial firms from collapsing.
In his final week in office, Biden said he was committed to holding accountable those responsible for the financial mess. He also noted that strengthening the accountability of executives would deter future misconduct.
Democrats on Capitol Hill are also calling for tougher measures to prevent another financial crisis.
Several members of Congress, including Elizabeth Warren of Massachusetts and Representative Katherine Porter of California, have introduced bills that would restore parts of the Dodd-Frank Act. Senator Bernie Sanders of Vermont blamed the president for the current situation.
In a statement, Sanders blamed the president for the failure of the Silicon Valley Bank. He noted that Trump signed a bill in 2018 that was designed to deregulate the financial industry.
Despite the president's claims about the bank's failure, Republicans noted that the regulations were not the reason for the financial crisis.
Despite the bank's collapse, several Democrats in the Senate and House voted to support the legislation that rolled back the regulations. Republicans, on the other hand, noted that the regulations should have been tougher to prevent the situation from happening in the first place.
A spokesperson for Senator Tim Scott of South Carolina noted that the failure of the bank was the result of the failure of the regulators. He said the regulators failed to spot the bank's idiosyncrasies and the risks it exposed.
If the bank's failure was an outlier in the system, then why weren't the authorities taking action? They failed to do their jobs properly, he said.
Republicans pointed to high inflation as the main factor that caused the bank's failure. They noted that the Federal Reserve was raising interest rates to combat this issue. They also blame Biden for signing the American Rescue Plan Act, which increased the inflation rate.
Some conservative groups also believe that banks will be able to evade new regulations. They argue that the government should not be involved in the financial industry.
According to financial analyst and Heritage Foundation research fellow, EJ Antoni, the US should treat banks the same as other businesses when they are irresponsible or reckless. He said this is partly why the country has continued to have problems with the financial industry.
In response, Biden called for the authorities to impose penalties on executives who are responsible for the failure of a bank. He also said that regulators should be empowered to seize compensation from executives.
The accompanying fact sheet also noted that the CEO of the failed bank had reportedly sold millions of shares before the company went bankrupt.
Even though the president is calling for Congress to act, Biden and his team have been taking various actions on their own. Some of these include making child care more affordable, reducing student loan debt, and providing gas stoves for gig workers.
With the conservative majority in the Supreme Court and the House of Representatives, Biden may not be able to implement his various initiatives.
According to Brad Bannon, a Democratic strategist, the president is still winning the battle to reach out to voters.
He noted that Biden's statements about the importance of maintaining regulations are a great way to communicate the cause of the financial crisis and how it can be prevented.
Despite the Fed's actions in raising interest rates, which contributed to the failure of the bank, according to the strategist, most voters will still connect with the issue of regulation.
According to him, the failure of the bank is also a way to connect with the public. He noted that Republicans have been trying to deregulate the financial industry. This is a battle that Biden will be fighting against them.
The preceding article is a summary of an article that originally appeared on The Bearded Patriot
