The Federal Reserve on Friday blamed the deregulatory zeal that occurred during the Trump era for contributing to the second-largest bank failure in U.S. history, appearing to take a clear stand on an acrimonious policy divide in Washington.
Amid the turmoil that Silicon Valley Bank's implosion unleashed on the financial system last month, some Republicans and industry advocates have argued strenuously that a 2018 roll-back of post-financial-crisis safeguards was not to blame.
But the Fed's searing 100-page postmortem says bipartisan legislation in 2018 loosened post-financial crisis safeguards, undermining oversight by hindering the work of bank supervisors and encouraging the capital weakness that ultimately proved fatal to SVB.