Former President Donald Trump and other 2024 Republican presidential hopefuls spoke out over the weekend on the failure of Silicon Valley Bank, offering early hints of their varied approaches to the markets.
Trump, who’s widely considered the frontrunner among the many early field of official and certain candidates, took the chance to lash out at President Joe Biden, while offering no specifics about how he would handle the situation otherwise.
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In a Truth Social post on Saturday, Trump issued an all-caps prediction that “WE WILL HAVE A GREAT DEPRESSION FAR BIGGER AND MORE POWERFUL THAN THAT OF 1929. AS PROOF, THE BANKS ARE ALREADY STARTING TO COLLAPSE!!!”
That claim got here as Trump’s spokesman asserted in a press release to Fox News that “Biden has presided over a catastrophic economy that has devastated on a regular basis Americans and has caused misery across the country attributable to his anti-America policies.”
Meanwhile, Florida Gov. Ron DeSantis, who’s seen as Trump’s top Republican competitor despite the fact that he has yet to officially announce a White House bid, suggested that diversity, equity and inclusion initiatives were accountable for the bank’s failure.
“This bank, they’re so concerned with DEI and politics and all types of stuff, I feel that basically diverted from them specializing in their core mission,” DeSantis said in a Fox interview Sunday morning.
SVB’s website had a page touting its embrace of diversity initiatives — but experts have attributed the collapse to a series response stemming from rate of interest hikes and the bank’s failure to effectively hedge against it.
DeSantis also appeared to complain about over-regulation, saying, “We’ve got an enormous federal bureaucracy and yet they never appear to give you the chance to be there when need them to give you the chance to stop something like this.”
Silicon Valley Bank, or SVB, was shuttered by financial regulators last week, marking the most important failure of a banking institution for the reason that 2008 financial crisis. The sudden collapse of the nation’s Sixteenth-largest bank, a significant player within the tech industry, set off a wave of fear about whether the fallout will spread to other major banks.
The federal government on Sunday evening announced a plan to be certain that depositors at SVB and Signature Bank, a most important lender to the cryptocurrency industry that was also shut down, can have full access to their deposits. Bank regulators emphasized that taxpayers won’t cover the prices to insure deposits. A special fee can be assessed to federally insured banks to replenish the Deposit Insurance Fund, they said.
Biden in a speech Monday called for a “full accounting” of the situation and for steps to be taken to cut back the chance of future bank failures. He also noted that “investors within the banks is not going to be protected,” adding, “That is how capitalism works.”
Biden, who is anticipated to announce he’ll run for reelection in 2024, delivered the speech after multiple possible rivals weighed in on the crisis.
Former South Carolina Gov. Nikki Haley on Saturday night declared, “taxpayers should absolutely not bail our Silicon Valley Bank.”
“Private investors can buy the bank and its assets. It is just not the responsibility of the American taxpayer to step in,” Haley said in a press release, adding, “The era of huge government and company bailouts must end.”
A Haley campaign spokesman declined CNBC’s request for extra comment Monday morning, following the federal government’s assurance that taxpayer funds wouldn’t be used to backstop the failed banks.
Trump also accused “out-of-control Democrats” of blaming Trump for the collapse. Some lawmakers, including Sen. Bernie Sanders, I-Vt., and other critics have recently pointed to laws signed by Trump in 2018 that rolled back some banking regulations. The bill received bipartisan support in Congress, though some Democrats criticized the measure on the time.
“Let’s be clear. The failure of Silicon Valley Bank is a direct results of an absurd 2018 bank deregulation bill signed by Donald Trump that I strongly opposed,” Sanders said in a statement Sunday.
The Biden administration has bristled on the notion that it’s bailing out the banks, with officials noting that shareholders and bond holders on the banks aren’t being protected.
Vivek Ramaswamy, an entrepreneur and conservative political commentator who jumped into the GOP primary race last month, had argued on Twitter that the federal government should “let SVB fully fail” without protecting its depositors.
The Federal Deposit Insurance Corp., “should get out of the best way & let whoever wants to amass SVB to really do the deal,” Ramaswamy tweeted Saturday.
Steve Laffey, one other GOP presidential candidate, in a press release Saturday said that his own party and the U.S. more broadly “have avoided directly confronting our problems for a few years, and the outcomes have been disastrous.”
