PanamaTimes

Sunday, Oct 25, 2026

US bank collapse sparks fresh oversight fight in divided Congress

US bank collapse sparks fresh oversight fight in divided Congress

The weekend collapse of Silicon Valley Bank (SIVB.O) sparked a partisan battle in Washington on Monday, with Democrats arguing that a Trump-era change to bank oversight rules undermined the stability of regional banks, claims that Republicans rejected.
Democratic President Joe Biden called on Congress and banking regulators to strengthen the rules for banks "to make it less likely this kind of bank failure will happen again," while officials said customers at SVB and New York-based Signature Bank (SBNY.O), which also collapsed, would have access to all their deposits starting Monday, and announced a new facility to give banks access to emergency funds.

An administration official said there was no timeline for Biden to make any particular requests of Congress as his aides were still working to manage the immediate situation and better understand what caused the crisis and what to ask of lawmakers.

At issue are changes to the Dodd-Frank Act passed in 2018, pushed by Republicans, which raised the threshold at which banks are considered systemically risky and subject to stricter oversight to $250 billion from $50 billion. Silicon Valley Bank had $209 billion in assets at the end of last year, while Signature Bank had some $110 billion.

"Let's be clear. The failure of Silicon Valley Bank is a direct result of an absurd 2018 bank deregulation bill signed by (Republican former President) Donald Trump that I strongly opposed," Senator Bernie Sanders said in a statement.

Republicans rejected the idea that the changes made during Trump's four years in the White House were to blame.

"That is absolutely not the case," said Bill Hagerty, Senate Appropriations Subcommittee on Financial Services and General Government Ranking Member.

"What we've had, I think, in every sense is a management failure both from the standpoint of SVB's management as well as the San Francisco Fed," said Hagerty in an interview following a briefing by Treasury Department and Federal Deposit Insurance Corp officials to a bipartisan group of lawmakers on Monday.

Hagerty said Congress should determine who was accountable among regulators at the San Francisco Federal Reserve Bank and within SVB's management before considering new regulations.

"Where was the San Francisco Fed?" he added, saying awareness of the bank's recent growth and business model should have led Fed officials to anticipate trouble.

Hagerty also said that he and Federal Reserve Chairman Jerome Powell spoke on Sunday and agreed that markets might remain choppy for a few days. "My hope and expectation is that as the markets digest the information that's there, the markets will calm and settle," the Tennessee Republican said.

Experts say SVB ultimately collapsed because it failed to manage its portfolio amid rapidly rising interest rates, and had a huge amount of uninsured deposits that were quick to leave when the stress was apparent.

In an op-ed for the New York Times, Democratic Senator Elizabeth Warren placed some of the blame at the feet of bank regulators, whom she accused of "letting financial institutions load up on risk."

"It's clear there were big misses here," said Jonah Crane, a partner with Klaros Group and former Treasury Department official. "For one, the Fed has only once ever stress tested for a high interest rate environment, despite knowing they would have to raise rates."

Prospects for new banking legislation in a divided Congress are dim. As a result, regulators will also be in the spotlight for speedier tweaks, said Ian Katz, managing director of Capital Alpha Partners, in a note.

"There won't be legislation getting through Congress, and so regulators will be making the big decisions," he said.
Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
Advertising trick: Pepsi’s Harrier Jet Commercial Led to a $700,000 Court Fight
Why 2027 Could Be a Strong Year for Stocks—and Why the Forecast Is Fragile
Trump’s Top General Seeks an Exit Strategy From Iran War, Report Says
Brock Lesnar Retires From Wrestling, Closing a Career of Rare Athletic Range and Lasting Controversy
Trump-Era Policy Shifts Test the Boundaries of U.S. Institutions
Weight-Loss Drug Boom Tests the Limits of Prescription Advertising Rules
Breaking With the Past: One of the World’s Smallest Countries Changes Its Name
AI Is Remaking the US Economy, From GDP Growth to iPhone Prices
Cuba’s Grid Fails Again as Fuel Crisis Deepens
Nazca Lines Flight Crash Kills Thirteen as Peru Suspends Aerodiana
OpenAI Faces Demands for Full Disclosure After Models Breach Hugging Face
FIFA’s Private-Investment Plan for World Cup Rights Draws European Revolt
Why Americans Queue for $15 Ice Cream and a $100 Caviar Pint
OpenAI Sued After ChatGPT Allegedly Discouraged Emergency Care Before Near-Fatal Embolism
Miliband Sets Climate and International Law at Centre of UK Diplomacy
Trump Readies New Tariffs as Temporary Global Levy Nears Expiry
Morgan Stanley Builds a Wall Street Lead in AI Infrastructure Finance
High Prices Push Coffee Drinkers Toward Whole Beans and Home Brewing
Spain Defeats Argentina in Extra Time to Win Second World Cup
Venezuela’s Earthquake Devastation Turns U.S. Investment Opportunity Into a Thirty-Seven Billion Dollar Reconstruction Challenge
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
The Ledger Will Not Trust on Faith
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
The Ten World Cup Finals That Defined Football History
Smartphones Are Getting More Expensive, Sales Are Collapsing, and Even Apple Admits: "Prices Will Rise"
The AI Race Enters Its Infrastructure Era
Colombia Influencer Dies After Cosmetic Procedure at Unlicensed Bogota Salon
A Quiet Bastille Day: France Grapples with World Cup Heartbreak and Leftover Fireworks
Spain in Ecstasy: "We Feel Unbeatable, We Taught the Whole World a Lesson"
On the Island That Did Not Yield to Trump, There Is No Electricity, and 10 Million Live in Darkness
World Cup Visitors Turn American Big-Box Stores Into Souvenir Stops
Anthropic Reengineers Agentic Architecture to Shift Autonomous Workplace Automation to the Cloud
Global Crisis Alert: Escalating Middle East Tensions and UK Political Upheaval
Japanese Technology Firm Fujitsu Launches Advanced Artificial Intelligence Tool for Corporate Disclosures
South Africa Officially Launches Nationwide Campaign for Highly Contested Local Government Elections
United Kingdom Commits Additional Funding for Unexploded Ordnance Clearance in Laos
Singapore Announces Stringent New Greenhouse Gas Regulations for Commercial Cooling Systems
Cambodia and Thailand Hold High-Level Border Security Talks at United Nations Headquarters
Myanmar Military Government and China Sign Major Agreement to Upgrade Media and Cultural Cooperation
Knife Attack at Swiss Train Station Leaves Three Injured in Suspected Act of Domestic Terrorism
Transnational Extortion Gang Threatens Canadian Police With Army of One Thousand Armed Operatives
Australia Imposes Forty-Two-Day Quarantine on Cruise Ship Passengers Following Deadly Hantavirus Outbreak
International Monetary Fund Unlocks Seven Hundred Million United States Dollars for Sri Lanka Following Economic Reforms
Australia Launches Record One Point Four Billion Dollar Lawsuit Against Chemical Giant 3M Over Contamination
China and Canada Foreign Ministers Meet in Ottawa in Effort to Stabilize Strained Diplomatic Ties
Indonesia Demands Urgent United Nations Security Council Reform Amid Escalating Global Conflicts
Extreme Weather Patterns Trigger Severe Drought in Madagascar and Destructive Flooding in East Africa
Indian State of Karnataka Faces Political Upheaval as Chief Minister Siddaramaiah Abruptly Resigns
Philippines and Japan Reaffirm Defense Ties as Crucial for Indo-Pacific Regional Stability
Norway Joins French Nuclear Deterrence Initiative in Major Shift for European Security Architecture
×