Only 15 U.S. banks were deemed “too big to fail” and subjected to rigorous stress testing after the Great Recession.
Friday’s closure of the nation’s 16th largest bank demonstrates the Biden administration feels all banks are too big to fail.
Silicon Valley Bank last week announced it would issue billions in new stock to bolster its finances. That news prompted venture capital funds to tell their startups to yank their money from SVB. A classic bank run ensued, which regulators stopped by seizing control of the bank and placing it into receivership.
Fox Business further reported:
Silicon Valley Bank, the nation’s 16th-largest bank, failed Friday after depositors hurried to withdraw money amid anxiety over the bank’s health. It was the second-biggest bank failure in United States history after the collapse of Washington Mutual in 2008.
The bank’s California executives and political action committee have propped up a handful of politicians in recent elections, which has primarily benefited Democrat lawmakers.
Greg Becker, the bank’s president and chief executive officer, cut two maximum checks totaling $5,800 to the campaigns of New York Senate Majority Leader Chuck Schumer and Virginia Sen. Mark Warner during the 2022 midterm election cycle. The two Democrat senators are the only politicians Becker financially backed directly during the most recent cycle.
Becker also gave $2,500 to the New Democrat Coalition Action Fund in May last year. The New Democrat Coalition Action Fund sent $1 million in contributions to numerous Democrat politicians during the 2022 elections.
Becker’s most recent donations came on the heels of $5,600 he donated between President Biden’s 2020 campaign and victory fund.
Jeffrey Leerink, the chief executive officer of SVB Securities, donated $1,250 to Massachusetts Democrat Rep. Jake Auchincloss during the 2022 and 2020 elections.
Meanwhile, Silicon Valley Bank’s chief credit officer, Marc Cadieux, poured $250 into Biden’s campaign during the 2020 elections.
The bank’s political action committee has received around $40,000 from its employees over the past two election cycles. In turn, it contributed thousands to Warner, New York Democrat Rep. Gregory Meeks and North Carolina Republican Rep. Patrick McHenry during the 2022 elections.
It also passed thousands of dollars to Michigan Democrat Sen. Gary Peters and California Democrat Reps. Maxine Waters and Zoe Lofgren’s campaigns during the 2020 elections, among a few others.
“The employees and executives at Silicon Valley Bank, as well as their shareholders, receive nothing from the decisions made by Treasury and FDIC,” Lofgren told FOX Business. “Through fees levied on the banking sector, not taxpayers, the bank’s depositors are assured access to their own money and can now pay their bills and their employees.”
Silicon Valley Bank did not respond to a FOX Business inquiry on its executive and PAC donations. The Biden, Schumer, Warner, Auchincloss, Meeks, McHenry, Peters and Waters campaigns also did not respond to a request for comment on the contributions.
Silicon Valley Bank’s failures have since had a ripple effect elsewhere. Federal regulators announced Sunday that New York-based Signature Bank was shutting down to protect consumers and the financial system following the collapse of California’s Silicon Valley Bank.
The announcement came in a joint statement from the U.S. Treasury Department, Federal Reserve and Federal Deposit Insurance Corporation. The regulators said Silicon Valley Bank clients would have access to their money starting Monday at no expense to the American taxpayer.
A similar program, they said, was being enacted for Signature Bank, which was closed Sunday by its state chartering authority.
“All depositors of this institution will be made whole,” the joint statement read. “As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.”
A spokesperson for Signature Bank declined to comment.
Founded in 2001, Signature Bank was popular among crypto companies. The institution provided deposit services for its clients’ digital assets but did not make loans collateralized by them.
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