In a statement this week, the House of Representatives Freedom Caucus said they oppose the recent bailing out of banks. Instead, the caucus blames regulators for not noticing the risks that banks, such as Silicon Valley Bank, posed beforehand. The House Freedom Caucus posted a statement on their Twitter account, announcing their position on the bank failures.
It's time to end the downward spiral of big government bailouts. Americans are done with it. pic.twitter.com/5Gi5lEgUCD
— House Freedom Caucus (@freedomcaucus) March 20, 2023
The statement reads:
The House Freedom Caucus remains firmly committed to ending out-of-control spending in Washington, and the resulting inflation, that lies at the heart of the current turmoil in the banking system. Furthermore, Members of the House Freedom Caucus oppose any universal guarantee on bank deposits over the current limit, as well as any attempt to force unnecessary, burdensome regulations or costs onto small mid-sized banks (and their customers) who are at no fault in this crisis.
The House Freedom Caucus has adopted the following official position to end the downward spiral of big government bailouts:
“The House Freedom Caucus continues to stand for the forgotten men and women of America, and Americans are done with government bailouts — especially when caused by the government’s own policies, apparent regulatory failures, and clear management ineptitude.”
“Out-of-control spending in Washington and Federal Reserve interventions have fueled skyrocketing inflation. Having mismanaged interest rate policy and their own balance sheet, the Federal Reserve reacted by rapidly increasing interest rates after keeping them artificially low for far too long. The Federal Reserve set the conditions for this crisis and out-of-control DC spending lit the fuse.”
“The Federal Reserve must unwind its extraordinary “Bank Term Funding Program” as soon as possible. Any universal guarantee on all bank deposits, whether implicit or explicit, enshrines a dangerous precedent that simply encourages future irresponsible behavior to be paid for by those not involved who followed the rules.”
“Exhaustive oversight must be conducted into how regulators seemingly turned a blind eye to the inept management of Silicon Valley Bank, even as the bank was clearly more focused on Leftist ‘woke’ DEI and ESG policies than interest rate risk management. The management team at SVB rightly faces criminal investigation by the DOJ.”
“It is apparent this was a failure by regulators – not of regulations. Republicans msut oppose any effort to uste this as justification to impose unnecessary, burdensome regulations on other small and mid-size banks who bear no fault or responsibility. Similarly, these banks and their customers must not be forced to shoulder the costs for bailing out large depositors. Democrats want to make all banks ‘to big to fail’ and will drive further consolidation in the financial sector. No bank should be ‘too big to fail,’ period.”
The Freedom Caucus maintains that this was a crisis caused by a failure of regulators, not necessarily regulation. Republicans maintain that they will fight to preserve former president Donald Trump’s roll back of the Dodd-Frank regulations on small and mid-sized banks in place. Republicans and Democrats are looking at the Federal Reserve Bank of San Francisco and questioning how they overlooked SVB’s “risky structure.” Sen. Ted Cruz (R-TX) said, “The SF Fed’s failure to address SVB’s obviously risky structure is frankly shocking.”
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