Sen. Kevin Cramer (R-ND) rebuffed calls for increased banking regulations in the wake of Silicon Valley Bank‘s collapse.
The senator took note of inflationary pressures and other economic turbulence that preceded SVB’s collapse but downplayed concerns that the rollback of the Dodd-Frank regulations for mid-sized banks during the Trump administration contributed to it.
SILICON VALLEY BANK COLLAPSE: CEO CASHED OUT MILLIONS WHILE EMPLOYEES GOT BONUSES
“They certainly don’t need any more regulation. That doesn’t mean that you can be mismanaged,” Cramer told NBC’s Meet the Press. “We have seen a rather sharp increase in interest rates which have put some smaller banks at odds with their own balance sheet.”
Dodd-Frank was a sweeping banking regulation and reform package enacted in response to the 2008 financial crisis that featured stress tests and liquidity requirements for banks.
Instead of bolstered regulation, Cramer suggested smaller banks could get “better oversight, but certainly not more regulation.” Cramer sits on the Senate Committee on Banking, Housing, and Urban Affairs.
On Wednesday, Silicon Valley Bank announced it sold a bevy of securities at a loss, which triggered panic from venture capital firms. As a result of a run on the bank, SBV collapsed Friday, which led to a takeover by federal regulators. Treasury Secretary Janet Yellen indicated that that the government is working to help depositors afflicted by the collapse.
Silicon Valley Bank’s failure was the largest one of its kind in the United States since Washington Mutual faltered during the 2008 financial crisis. Sen. Mark Warner (D-VA), who also sits on the Senate Committee on Banking, Housing, and Urban Affairs, defended his decision to support the Dodd-Frank rollback during the Trump administration. He was one of 17 Democrats to back the measure.
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Cramer stressed that it was unnecessary for Congress to battle over the debt ceiling amid the slate of economic volatility on the horizon.
“We don’t need to have a fight on [the] debt ceiling. But this is why I think it’s foolish for the President to simply say, ‘I’m not going to negotiate on the debt ceiling.’ This is the time to have a negotiation and do something,” he added.