Mar 14, 2023 - Politics & Policy

Warren to SVB CEO: "You lobbied for weaker rules, got what you wanted"

Senator Elizabeth Warren, a Democrat from Massachusetts, speaks during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, DC, US, on Tuesday, March 7, 2023.

Sen. Elizabeth Warren (D-Mass.), speaks during a Senate Banking, Housing, and Urban Affairs Committee hearing on March 7. Photo: Al Drago/Bloomberg via Getty Images

Sen. Elizabeth Warren (D-Mass.) in a letter Tuesday slammed Silicon Valley Bank CEO Greg Becker for his role in its collapse, homing in on his support for rollbacks of some Dodd-Frank banking rules.

The big picture: Warren has been outspoken in the aftermath of SVB's collapse, criticizing Trump-era rollbacks to parts of the Dodd-Frank Act, which provided regulatory relief for midsized banks like SVB.

  • On Monday, Warren wrote in a New York Times opinion piece urging Congress, the White House and banking regulators to reverse "the dangerous bank deregulation of the Trump era."
  • She said that repealing the 2018 legislation "must be an immediate priority for Congress."

Driving the news: Warren on Tuesday focused on Becker's role in the collapse. "You have nobody to blame for the failure at your bank but yourself and your fellow executives," she said.

  • "You lobbied for weaker rules, got what you wanted, and used this opportunity to abdicate your basic responsibilities to your clients and the public – facilitating a near-economic disaster," she wrote.
  • Warren in the letter also requested answers from Becker on several questions related to SVB's failure and his "role in the rollback of banking regulations that facilitated this failure."
  • Warren requested answers from Becker by March 28.

Zoom in: Warren, one of the key architects of post-2008 reforms, is not alone in calling for large-scale financial reforms in the aftermath of the fall of both SVB and Signature Bank, a key bank for the cryptocurrency industry.

  • Many Democrats are zeroing in on the rollback of Dodd-Frank banking rules in 2018.
  • "We need to put back in place protections Republicans and big banks gutted in 2018 once the immediate crisis is contained," Rep. Adam Schiff (D-Calif.) told Axios' Andrew Solender.
  • Warren in 2018 was a vocal critic of the rollbacks, saying it would bring unnecessary risk to the financial system and harm consumers.

Go deeper... Silicon Valley Bank's political blame game

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