White House: You Can’t Blame Mostly ‘Idiosyncratic Situation with a Handful of Banks’ on Biden’s Spending, Inflation, and Rate Hikes

On Tuesday’s broadcast of MSNBC’s “Chris Jansing Reports,” White House National Economic Council Deputy Director Bharat Ramamurti denied that President Joe Biden bears blame for the collapse of Silicon Valley Bank (SVB) because spending by the Biden administration lead to inflation and interest rate hikes that destroyed SVB and argued that if that were true, “you would see many, many banks facing this kind of situation. Instead, what you’re seeing is largely an idiosyncratic situation with a handful of banks.” He also stated that, thanks to the administration’s actions over the weekend, “Americans should feel confident that their deposits in their bank will be there if they need them.”

Ramamurti began by saying, “[T]hanks to the actions that the administration took over the weekend, Americans should feel confident that their deposits in their bank will be there if they need them. And thanks to the actions we’ve taken, we’ve seen additional stability in the system relative to where we would have been if we had not taken those actions. As for how we got to this place, I just want to emphasize that the CEO of Silicon Valley Bank…during the Trump administration, personally lobbied for looser rules on banks like his, and the Trump administration listened. And that played a role in why we’re here today. So, we’re acting decisively to protect American small business, American workers, provide stability to the banking system so people can rely on it. But as the President made clear, we’ve got to do more. We’ve got to go back and fix the rules that got rolled back in the last administration.”

Later, host Chris Jansing asked, “Just in the last hour, Speaker McCarthy (R-CA) put out a statement on Twitter…it says, ‘Biden’s reckless spending caused record inflation and rapid interest rate hikes that broke family budgets and banks too. We must restore fiscal sanity.’ What’s your response to that, does the White House share any of the blame for this?”

Ramamurti answered, “I think if that argument were the case, you would see many, many banks facing this kind of situation. Instead, what you’re seeing is largely an idiosyncratic situation with a handful of banks. Banks — by the way, and I think this gets to the reason we’re here — the exact category of banks that were deregulated in the previous administration. I think the story here at the bottom line is that, a set of banks that, in the previous administration, Republicans were largely saying, these are not systemically important, if something bad happens at one of these banks, it’s not going to spread more broadly in the financial system, what we have seen over the last little bit, several days is that that argument, that core argument was incorrect. And so, we are working hard to fix that, to deal with the implications of it, and to make sure we’re not back in that position again.”

Follow Ian Hanchett on Twitter @IanHanchett

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