Several critics are pointing fingers at Donald Trump and Republican senators for the collapse of Silicon Valley Bank.
Before Friday, the SVB was the leading lender to tech firms and startups in Silicon Valley.
According to SVB, it will sell $2.25 billion in new shares to help right its balance sheet after selling some securities at a loss.
In response to the announcement, VC firms advised their clients to withdraw their money from the bank. This led to a bank run, which led to the institution’s stock plummeting.
Yale professor Howard Forman released a list of Republican senators supporting reducing SVB regulatory oversight in 2018, which Trump signed into law.
Senators like Marco Rubio, Lindsey Graham, Rand Paul, and Mitch McConnell are on the list, along with certain Democratic Senators Joe Manchin and Tim Kaine.
Here is the list of Senators who voted to REDUCE the regulatory oversight of Silicon Valley Bank (SVB) in 2018, signed into law by then President Trump. Maybe ask them why they did this?
cc: @marcorubio @LindseyGrahamSC @RandPaul @MarkWarner pic.twitter.com/MNerJbgPxc
— (((Howard Forman))) (@thehowie) March 11, 2023
David Sirota, the founder of The Lever, specifically pointed out the number of senators who voted to reduce the regulatory oversight of the bank.
“50 Republican and 17 Democratic senators voted to ignore warnings and weaken risk regulations for Silicon Valley Bank,” he said. “Donald Trump signed the bill into law. And now the bank is the 2nd biggest bank collapse in American history.”
As the Fed sought to stifle inflation, the SVB suffered from higher borrowing costs which suppressed tech stock gains. An overall decline in available venture capital funding forced companies to sell their investments.
Experts who spoke to the New York Times said a bank the size of SVB “might have managed its interest rate risk better had parts of the Dodd-Frank financial-regulators package not been rolled back under President Trump.”
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