(Daily360.com) – The Biden Administration’s decision to guarantee all deposits in the now collapsed Silicon Valley Bank (SVB) and Signature Bank has drawn sharp criticism domestically and now abroad. Financial regulators from Europe are starting to weigh in and it’s less than cordial. They point to a total disregard for the U.S. government’s own standards. One very notable decision is especially vexing to the Euros, the guaranteeing of all deposits over $250,000.
One official termed U.S. authorities as having “total and utter incompetence” and then chided hypocrisy as he says the U.S. had been advocating ending all “bailouts” prior to the collapse. Nicolas Véron, a regulation expert at the Washington think-tank the Peterson Institute, likened the U.S. decision to stabilize the banking industry to trying to kill a fly with a sledgehammer. He also said calling the SVB an indicator of something systemic is “very questionable.”
SVB collapsed on March 10th, and within only three days the Biden Administration had taken the bank over and announced they would guarantee all deposits. President Biden then pivoted to blaming the bank executives whom he said he would hold responsible. He continues to say these measures will not be paid by taxpayers and will solidify the banking sector. One European regulator referred to those pledges as a “joke.” He said the cost will most certainly fall to tax-payers as banks paying more into Federal Deposit Insurance Corporation (FDIC) will pass those costs on to customers. He said wealthy venture capitalists will be taken off the hook and the “ordinary people” will pay the bailout.
Domestically, the administration’s claims were met with similar rebuke. Research fellow in regional economics with The Heritage Foundation’s Center for Data Analysis, EJ Antoni said they don’t pass the “smell test.” He said if the government is spending taxpayer dollars then the taxpayers are funding the bailout by definition. He similarly pointed out that the FDIC does not have the funds to meet these guarantees.
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