The Biden White House is calling on federal banking regulators to institute a number of changes intended to provide more oversight on large regional banks and reduce the risk of a future banking crisis.
The administration announced its regulatory push on Thursday in response to the recent collapse of two large regional banks, Silicon Valley Bank and Signature Bank, and subsequent market concerns about the potential for contagion throughout the industry. Many of the president’s proposed safeguards – which include restoring regulations rolled back during the Trump administration – have been discussed by regulators themselves, and while the administration can recommend these changes be instituted, they cannot force these regulators to take action.
A White House official repeatedly blamed regulatory rollbacks during the Trump administration for contributing to the recent banking industry woes, adding in a call with reporters on Thursday that President Joe Biden “believes that the weakening of common-sense bank safeguards and supervision during the Trump administration for large regional banks should be reversed in order to strengthen the banking system and protect American jobs and small businesses.”
“The Obama-Biden administration put in place strong requirements – primarily through the Dodd-Frank Act and subsequent regulations and supervision – to reduce the risk of future banking crises. Unfortunately, the Trump administration and its regulators weakened many important common-sense requirements and (weakened) supervision for large regional banks like Silicon Valley Bank and Signature Bank, whose recent failure led to the risk of contagion throughout the banking system,” the official said. “Independent experts have said that these rollbacks during the previous administration were a contributor to recent bank failures.”
The president, in…
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