![]() ![]() “Numerous other enhancements to prudential standards have encouraged banks to strengthen their balance sheets and risk management,” said an August 2022 letter to regulators from lobbying groups including the American Bankers Association, the Bank Policy Institute, and the Mid-Size Bank Coalition of America, all of which count Silicon Valley Bank as a member. Join our fight by becoming a free subscriber today. We're building a reader-supported investigative news outlet that holds accountable the people and corporations manipulating the levers of power. Lobbying groups representing Silicon Valley Bank, or SVB, argued that risk of bank failures is low and insisted that requiring banks to pay more into the fund would harm financial institutions’ bottom lines. ![]() Last year, bank lobbying groups mobilized against the Federal Deposit Insurance Corporation’s (FDIC) proposal to raise banks’ insurance premiums to shore up that deposit fund’s reserves, which had fallen below the minimum required by law. On Sunday, federal regulators announced an emergency action that “fully protects all depositors” at the bank, and they pledged that “any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks.” Put simply: Powerful banking interests and their allies in Congress have made clear they oppose measures that would force banks to pay higher premiums in order to fund depositors’ insurance. ![]() In the months before Silicon Valley Bank’s collapse, the bank’s lobbying groups fought a proposal requiring financial institutions to increase payments into the Deposit Insurance Fund that protects depositors from bank failures, according to federal records reviewed by The Lever.Īs lawmakers now face calls to expand deposit insurance to stave off a wider bank run, the battle shows why that insurance has remained limited - and why any new initiative to require banks to pay for more such insurance could face obstacles in Washington. ![]()
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