Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.) called for the federal government to take action on the “systemic failures” that led to the collapse of Silicon Valley Bank on the anniversary of the bank failure that briefly sparked fears of a wider crisis.
“One year ago, Silicon Valley Bank’s collapse became the second largest bank failure in U.S. history,” Jayapal said in a statement Monday. “While the bank’s wealthy depositors were made whole almost immediately, the systemic failures that allowed the collapse in the first place still have not been addressed.”
“This anniversary is an opportunity to course correct across the federal government,” she added.
Silicon Valley Bank was the first of several mid-sized regional banks that failed in quick succession last March, fueling concerns about potential contagion in the banking system.
In the wake of the bank failures, Democrats slammed the partial rollback of the Dodd-Frank Act in 2018 that freed most small and medium-sized banks from the law’s strict rules.
Jayapal appeared to hit on this again Monday, describing Silicon Valley Bank’s collapse as “the predictable and direct outcome of a furious 2018 effort by bank lobbyists to evade basic oversight, transparency, and financial stability in favor of profit.”
She also called on the Senate to pass legislation that would allow regulators to claw back compensation from senior executives of failed banks, while urging federal regulators to strengthen capital requirements for banks and curb incentive-based compensation arrangements at financial firms.
“Progressives will continue, as we always have, to demand a rewrite of the rules of a rigged economy so that working families can bank with peace of mind and bank executives are held accountable for reckless behavior and profiteering,” Jayapal said.
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