Is Donald Trump responsible for the second-biggest bank crash in US history?

The bankruptcy of the Silicon Valley Bank (SVB) created fear and speculation among bankers and techie alike in the United States and the world.

Many are trying to figure out why the California-based lender failed, and a few experts are putting the blame on Donald Trump’s policies.

SVB doesn’t have the name-recognition of, say, Bank of America or JP Morgan. That’s because the bank focuses on lending money to tech-related startups.

According to NBC News, SVB was the 16th largest US bank and its failure is the second-biggest of a financial institution in the country’s history.

The biggest one, of course, happened during the 2008 Financial Crisis and more than a few people are concerned that this is a prelude to another economic bust.

Another US financial institution, the New York-based Signature Bank also declared bankruptcy a few days after SVB. This is the third-largest bank collapse in US history.

Signature Bank had connections to cryptocurrency investments, though the New York financial regulator dismissed the bank’s closure as related to crypto.

Major European banks such as HSBC, Deutsche Bank, Barclays, and Credit Suisse received a major blow in the stock market days after the SVB collapse.

Al Jazeera explains that the California-based lender saw an income surge during the Covid-19 pandemic. SVB, in turn, invested this money in US government bonds.

When the US Federal Reserve began raising interest rates in 2022 to deal with growing inflation, the bonds started to lose value.

At the same time, the tech sector’s fall after the pandemic boom forced many of the SVB clients to withdraw their money, which forced the entity to sell its bonds, creating a bank run that led to its demise.

Many have tried to figure out why SVB collapsed. Some commentators, such as Tucker Carlson on Fox News, have argued that the bank executives were “too woke”, caring more about projecting a progressive image than finances.

The Daily Mail, meanwhile, highlights that only one SVB board member had a career in investment banking and that another member was a former employee of the Obama Administration.

The New York Times, on the other hand, points towards Donald Trump. In 2018, he signed a law to get rid of banking regulations put in place in the aftermath of the 2008 Financial Crisis, specifically the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“You have regulations that are horrendous,” Trump told a group of CEOs during a White House meeting on April 4, 2017, as quoted by the New York Post. “We are going to do a very major haircut on Dodd-Frank.”

50 Representatives and 17 Senators from the Democrat Party voted in favor of lessening bank regulations in 2018, with some controversy. Someone who opposed the law on the Senate floor? Vermont Independent Senator Bernie Sanders.

“Are our memories so short that we have learned nothing from the 2008 Wall Street Crash?” Sanders asked in the Senate on March 6th, 2018. “Now, 10 years later, these large financial institutions are back at it again”.

However, Al Jazeera points out that many agree that regulations would have done very little in the wake of a bank run.

Amid financial concerns, US President Joe Biden affirmed that the US economy would be fine.

“Americans can rest assured that our banking system is safe,” President Biden said during his March 13th speech.

Meanwhile, former US President Donald Trump went to social media to declare that “We will have a Great Depression far bigger and more powerful than that of 1929. As proof, the banks are already started to collapse!!!”