While Biden and Trump Blame Each Other for Bank Failure, Others Think It May Be a Management Problem – Economics Bitcoin News

The recent bank failures involving the downfall of Silicon Valley Bank (SVB), Signature Bank and Silvergate Bank have high-profile government figures scrambling to find a culprit. US President Joe Biden and former President Donald Trump have publicly blamed each other’s policies for the outcome, but according to some analysts, the problem may be ignorance in the banking system.

Biden and Trump argue about the causes of bank failures

The recent banking crisis that the US is now facing after the collapse of three mid-sized banks (Silicon Valley Bank, Signature Bank and Silvergate Bank) has spurred a political discussion between US President Joe Biden and former President Donald Trump to find the one responsible for the biggest the bank failures since the 2008 subprime mortgage crisis.

Biden and Trump have been very vocal and assigned blame for each other’s policies. On March 13, in the wake of the fall of Silicon Valley Bank, Biden reassured people about the isolated nature of the incident, urging Americans to trust the banking system, saying it was safe.

At the same time, President Biden blamed the bank failures on deregulatory advances that occurred under the Trump administration, where the stricter banking regulations established via the Dodd-Frank Act under former President Obama’s mandate were struck down. Biden stated:

Unfortunately, the last administration rolled back the regulations.

Trump was quick to reject these claims, making it clear that he holds the current administration responsible for the banking system’s current unstable state. As part of a speech delivered on March 28, Trump stated:

We are seeing bank failures left and right. Biden and his activists and Congress are directly responsible for creating this financial disaster. And with Joe Biden at the wheel, it will only get worse. This is what happens in almost every sector.

Another answer

But for some analysts, the blame lies in problems that could easily have been dealt with by assessing the risk of, for example, Silicon Valley Bank. This is the opinion of Andre Esteves, the millionaire CEO and founder of BTG Pactual, one of the largest investment banks in Latam, which manages over 70 billion dollars in assets.

For Esteves, it was the lack of expertise among bank operators resulting from years of low interest rates that caused the debacle at Silicon Valley Bank. Esteves explained that the current generation of operators only know inflation and hawkish politics by book, or in theory, and do not know how to deal with them in practice.

Esteves declared:

It’s very basic asset liability management that any junior analyst working in a bank in Chile, Brazil or Colombia or any other country that presents a bit more volatility would know.

Esteves also singled out Credit Suisse’s fall as an isolated incident that had been gestating for years.

What do you think about the responsibility of Biden, Trump and bank operators for the current banking crisis? Tell us in the comments section below.

Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price spike occurred during December 2017. He has a computer engineering background, lives in Venezuela and is influenced by the cryptocurrency boom on a social level, offering a different point of view on crypto success and how it helps the unbanked and underserved.

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