Former Trump White House adviser and chief economist at FreedomWorks Steve Moore said Silicon Valley Bank's collapse might be the "tip of the iceberg" for the financial system. Moore told Harris Faulkner Monday that the Biden administration's spending caused the Federal Reserve to raise interest rates, leading to financial problems for many major banks.
STEVE MOORE: I agree with the president that we don't have an overall banking crisis. The system is sound, but I do think you have a lot of major banks that are in some trouble. And SVB, the Silicon Valley Bank, may just be the tip of the iceberg here. And I think it's important for people to understand how this potential banking crisis happened. It's not because there aren't enough bank regulators, as Biden is trying to say. It's because of the massive inflation and the trillions and trillions of dollars of borrowing that the federal government has done that has put our financial system in great jeopardy and great peril.
You can't just keep doing this month after month, year after year, borrowing trillions and trillions of dollars. And so what happened, because of the Biden spending and debt policies, is that not only did inflation go up, but interest rates have gone up. Harris, as you know, the Fed has had to raise interest rates eight or nine times, and they're talking about more interest rate increases to come. And that's caused a lot of financial problems for these big banks is the interest rates go up.
President Biden said Monday that Americans should "feel confident" in their banking system after his administration's response to the collapse of Silicon Valley Bank (SVB) and Signature Bank last week.
Biden reiterated a statement from the FDIC and Treasury Department during public remarks Monday morning, telling reporters that the federal government would guarantee depositors at the banks access to their funds. He added that no such protection is being offered to the banks' investors, however. His administration has also fired the leadership at both banks.
"No losses will be borne by the taxpayers," Biden emphasized. "Instead, the money will come from the fees that banks pay into the deposit insurance fund. Because of the actions that our regulators have already taken, every American should feel confident that their deposits will be there if and when they need them."
