Stakeholders disagree on the role of crypto in the banks’ collapse of CoinEdition
- JW Verret mistakes US lawmakers’ opinions on the collapse of Signature bank (NASDAQ:SBNY).
- A regulator in New York has already exempted crypto in the collapse of Signature Bank.
- Senator Warren demands an explanation from Signature Bank CEO Joseph DePaolo.
JW Verret, professor of corporate and securities law, has disagreed with US Senator Elizabeth Warren over the role of cryptocurrency in the recent collapse of Signature Bank. Verret said Warren’s post on the matter was inaccurate and held her more accountable, knowing her capacity as a former professor of financial regulatory law.
According to Verret, a regulator in New York has already clarified that cryptocurrency played no role in the collapse of Signature Bank. He thinks Warren can make things up to indict the crypto industry.
Senator Warren reportedly wrote a letter to the CEO of Signature Bank demanding answers to what she described as “excessive risk-taking” as it ventured into crypto by relying on a “get-rich-quick narrative”. According to her, the bank failed because of “weak regulations and over-reliance on crypto.”
Warren accused the bank of creating financially disastrous outcomes and worked hard to “weaken the rules”. She also accused Signature Bank’s CEO, Joseph DePaolo, of destroying the institution by making poor decisions and taking excessive risks.
The legislator required the CEO to explain to the public so that others could learn from the bank’s failure.
Other charges Warren has leveled at the bank and its CEO include fighting to support efforts to reduce capital requirements built into the Dodd-Frank Wall Street Reform Act and lobbying leaders through campaign donations in an effort to loosen bank regulation in Congress.
Warren’s letter supports the views of other Democrats and herself, blaming the recent bank failures on a 2018 law approved by Congress and Donald Trump’s administration. They believe the law loosened capital requirements and liquidity tests, and exposed smaller regional banks to less onerous supervision.
Despite Warren’s argument, Verret believes her indictment of crypto as a cause of Signature Bank’s failure is wrong. He noted that the Fed models for the Signature stress tests were exempted from favoring Treasury holdings. Therefore, it would not help either.
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The post Stakeholders disagree on role of crypto in bank collapse appeared first on Coin Edition.
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