(BrightPress.org) – California Governor Gavin Newsom is taking flak for the Silicon Valley Bank (SVB) collapse that shook financial institutions to their core over the weekend. The largest failure of banking since the 2008 collapse has left people asking what exactly happened, and why in California, a state known for its excessive regulations, did no one step in before it was too late?
Chartered in California and headquartered in Santa Clara just outside San Francisco, SVB held large accounts with many Silicon Valley tech companies and offered loans to startups in the field as well.
Newsom issued a statement when the feds stepped in, thanking them for their “swift and decisive” action to protect our holy banking institutions. The situation looked grim Sunday night, so grim that congressmen were called up and asked to participate in an emergency Zoom meeting (yes, that Zoom) to discuss options.
The Treasury decided to bail out depositors, even those who had well above the FDIC insured limit of $250,000, in order to prevent a wider crisis and general run on the banks. There had already been attempted withdrawals from SVB and another NYC-based bank that went unfulfilled.
Governor Kathy Hochul tried to emphasize calm sentiments on Monday during a press conference. She suggested their interventions were designed to prevent a ripple effect and more severe instability in the financial system. Printing tons of money and shuttering huge swaths of the economy for a few years certainly didn’t help.
Politicians on all sides of the issue have assured taxpayers that public funds are not being used to bail out any banks. Instead, they’re taking the money from an insurance pool funded by fees the banks themselves pay. Is that really the case? In an age where politicians tend to lie about everything all the time, scrutinizing and critically questioning the proclamations of the oligarchs is a necessary step to ensure there aren’t further problems downstream.
How much of the responsibility belongs to Newsom’s office? While in Office, Newsom’s California has experienced rolling blackouts, raging wildfires, an epidemic of mental health crises, addiction, and homelessness, and now a severe financial crisis.
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