With multiple banks facing failure, we get why the government had to step in to prevent a dangerous ripple effect.
But why were things allowed to get so far in the first place? In large part, because of a dramatic weakening in regulations covering the banks during the Trump administration.
Here's Senator Elizabeth Warren:
"In the aftermath of the 2008 financial crisis, Congress passed the Dodd-Frank Act to protect consumers and ensure that big banks could never again take down the economy and destroy millions of lives. Wall Street chief executives and their armies of lawyers and lobbyists hated this law. They spent millions trying to defeat it, and, when they lost, spent millions more trying to weaken it. Greg Becker, the chief executive of Silicon Valley Bank, was one of the many high-powered executives who lobbied Congress to weaken the law. In 2018, the big banks won. With support from both parties, President Donald Trump signed a law to roll back critical parts of Dodd-Frank. Regulators, including the Federal Reserve chair Jerome Powell, then made a bad situation worse, letting financial institutions load up on risk."
You can see her full piece here, if you want the full details. But basically, we need these protections back asap if we wish to avoid the next crisis.
And if we're going to bail out these banks, then such regulation is a reasonable price to ask.
Tell Congress We Need Stronger and Smarter Bank Regulation -- Not More Bailouts!
