Republicans blame “woke” policies for bank failures, experts say it’s unfounded
The recent collapse of Silicon Valley Bank and Signature Bank has sparked controversy among hard-right Republicans who blame the banks’ “woke” social and environmental policies for their downfall. Florida Governor Ron DeSantis, Senator Josh Hawley, Representative Marjorie Taylor Greene, Representative James Comer, and former Vice President Mike Pence have all criticized the banks’ investments in social and environmental initiatives, alleging that these policies diverted the banks’ attention from their core mission. However, experts have rejected these claims, noting that there is no evidence that the banks’ investments in environmental, social, and governance (ESG) practices led to their collapse. Instead, most experts attribute the banks’ failure to a hike in interest rates and a decrease in venture capital funding.
The FDIC shut down Silicon Valley Bank and Signature Bank due to their financial difficulties. The FDIC promised to compensate all depositors, regardless of the $250,000 government insurance limit, citing “systemic risk” to the banking system. This promise has raised bipartisan concerns, with Senator Bernie Sanders arguing that any bailout should be financed entirely by Wall Street.
GOP leadership has urged members to avoid making factually inaccurate claims about the banks’ failure. House Financial Services Committee Chair Patrick McHenry and Senator Mitt Romney have expressed support for the government’s rescue plan, while the Chair of the Republican Study Committee, Representative Kevin Hern, has warned members not to fabricate a false narrative about the banks’ failure.
Some Democrats have blamed the collapse on regulatory rollbacks passed during the Trump administration, while others have criticized the Federal Reserve for not subjecting banks like Silicon Valley Bank to enough scrutiny. However, most experts agree that the bank’s reliance on the tech startup sector and the increase in interest rates were significant factors in its downfall.
Staff Reporter
