Sixteen Republican Attorneys General are blaming President Joe Biden’s leftist climate and energy agenda for helping to crash a major Silicon Valley bank.
“We write today to discuss how attempts to harness the federal financial regulatory apparatus in service of left-wing political goals are related to the recent high-profile failure of Silicon Valley Bank (SVB),” the letter from 16 Republican Attorneys General states. “SVB appears to have been focused more on environmental issues than safe and sound operations, which is perfectly consistent with your regulatory approach.”
The letter follows the collapse of SVB earlier this month, which has been referred to as the “Death of the Climate Bank.” It had been reported that the bank was involved in 60 percent of community solar financing nationwide, which the Attorneys General say aligns with the Biden administration’s “preferred regulatory posture” and the administration’s “whole of government” approach to fighting climate change.
Harvard Prof., Fmr. IMF Economist Rogoff: San Fran Fed Didn’t Know About SVB’s Problems, But Likely Knew ‘Their Carbon Footprint’
The group wrote:
To put it bluntly, the administration’s zealotry in fighting climate change by unwisely—and illegally—attempting to convert federal financial regulators into environmental activists is inextricably intertwined with these bank failures and the fallout from them. Your warping of the financial regulatory system undermines both the safe and sound operation of financial institutions and the public’s faith in the fairness and efficacy of the regulatory regime. We urge you to change course and refocus your efforts on managing actual financial risk.
It is time to turn away from this mistaken path and refocus federal efforts on actual financial risks that have the ability to do real harm to the national economy. Attempting to use the financial system to pursue environmental goals does nothing but increase risk. For example, banks that refused to do business with coal companies, but rushed to partner with green technology companies, made the wrong bet over the past two years, as coal company cash flow has skyrocketed while rising interest rates have exposed the weakness in many green energy business models. Serving a diversified customer base means having customers who generate cash flow that can help a financial institution offset the struggles of other customers.
You should publicly direct banks to pursue profitability, liquidity, and prudent risk management and note that declining to serve customers for failing to comply with unrealistic climate initiatives like achieving net zero by 2050 is a threat to the financial system. You should make clear that no agency, nor any agency personnel, has authority to pressure any bank to increase its exposure to net-zero compliant customers or to decline to do business with companies for not being net-zero compliant. You should also direct banks to stop setting emissions reductions targets that are inherently arbitrary and undermine public confidence in the financial system.
The letter was addressed to Treasury Secretary Janet Yellen, the Federal Reserve System (the Fed) Chair Jerome Powell, Federal Deposit Insurance Corporation (FDIC) Acting Chair Martin Gruenberg, and Office of the Comptroller of the Currency (OCC) Acting Chair Michael Hsu.
2023-03-21 Letter to Treasury Fed Reserve OCC FDIC Re SVB by Breitbart News on Scribd
Utah Attorney General Sean Reyes, who led the letter, said in a statement:
SVB’s failure is a warning sign that the administration’s environmental activism in its financial regulation not only ignores real financial risk but increases it. The administration should refocus regulation on true risk and stop pressuring financial institutions to meet impossible net-zero targets.
At the beginning of the month, SVB collapsed when panicked customers suddenly withdrew tens of billions of dollars after it announced a loss of approximately $1.8 billion from selling its investments in U.S. treasuries and mortgage-backed securities. Ultimately, regulators shut down the bank, and the FDIC took control. It was later said that the government would protect all depositors, even those past FDIC’s $250,000 limit.
SVB reopened last Monday as Silicon Valley Bridge Bank, N.A., under FDIC control. Both insured and uninsured had all assets transferred to the bridge bank. The bridge bank allows time for the agency to stabilize the institution and market the franchise. Until further notice, the bridge bank will continue to operate as a nationally chartered bank, so depositors have full access to all of their money.
Jacob Bliss is a reporter for Breitbart News. Write to him at firstname.lastname@example.org or follow him on Twitter @JacobMBliss.