(StraightNews.org) — Treasury Secretary Janet Yellen has said that America’s banking system is stable amid growing concern surrounding the collapse and falling share price of some financial institutions. She added however that some rescue arrangements could be warranted. Her remarks come after President Biden assured taxpayers that no public funds would be used to bail out the banks. “Let me be clear: The government’s recent actions have demonstrated our resolute commitment to take the necessary steps to ensure that depositors’ savings and the banking system remain safe,” she said.
The latest banking crisis began with the collapse of Silicon Valley Bank (SVB) in March, and this was followed by a second closure of Signature Bank based in New York. In a bid to slow inflation, the Federal Reserve has raised interest rates and is predicted to do so again. The rates rise contributed to deposit withdrawals which led to the collapse of the two banks within days of each other. Experts say this leaves the Federal Reserve in a difficult position as it decides whether to risk further increases.
In an unusual twist, however, some Republicans have blamed the bank crisis on “woke” philosophy inside the institutions. House Oversight Committee chairman James Comer called SVB “one of the most woke banks,” and former Trump advisor Stephen Miller has asked House Republicans to subpoena bank officials to explain how much money they’d spent on initiatives such as diversity and inclusion. Similarly, in a speech last year, former President Trump said financial institutions should be punished for their wokeness. Democrats on the other hand are blaming a relaxation of regulations during the Trump era. Senator Elizabeth Warren (D-Mass.) said, “President Trump and Congressional Republicans’ decision to roll back Dodd Frank’s “too big to fail” rules for banks like SVB – reducing both oversight and capital requirements – contributed to a costly collapse.”
Recent reports reveal that share prices have fallen in the First Republic Bank in San Francisco and several other smaller banks across the country.
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