GOP presidential candidate Ramaswamy calls SVB rescue crony capitalism

Indian-American entrepreneur Vivek Ramaswamy, who recently announced his US presidential bid for 2024 elections, said that the SVB asking for a bailout is crony capitalism and any kind of regulatory change should be applicable to all. This comes in the backdrop of Silicon Valley Bank collapse and the sweeping decisions taken by the US Federal Deposit Insurance Corporation (FDIC), which said all deposits of the lenders have been transferred to a new bridge bank.

In his tweet, he said that if the US Federal Deposit Insurance Corporation (FDIC) wants to raise deposit insurance limit above $250k, then they should prospectively do it for all.

“If you want to raise the FDIC deposit insurance limit above $250k, then do it prospectively for *all* Americans. But don’t retroactively change the rules on the fly after the fact, especially for SVB which itself lobbied for years for loose risk limits claiming it wasn’t “systemically important,” tweeted Vivek Ramaswamy.

He said for the startups that have put huge money deposits in the Silicon Valley Bank (SVB) was an “irresponsible” decision.

“SVB has long argued that it was subject to different threshold, different risk requirements, different capital requirement than bigger banks…why? because they have said all along that it wasn’t systemically important, until their portfolio companies and depositors and themselves have money in silicon valley bank and they are now saying it is systemically important,” he said.

“This is corruption. This is crony capatalism,” he added.

Silicon Valley Bank, a subsidiary of SVB Financial Group, was shut down by the California Department of Financial Protection and Innovation on March 10, after depositors rushed to withdraw their funds all at once.

The Treasury Department, Federal Reserve and FDIC on March 12 said that all Silicon Valley Bank clients would be protected and will be able to access their money. They also announced steps that are intended to be taken to protect the bank’s customers and prevent additional bank runs.

In a separate announcement, the Federal Reserve had said on March 12 that an expansive emergency lending programme would be rolled out to prevent a wave of bank runs that would threaten the stability of the banking system and the US economy as a whole.

On Monday, US Federal Deposit Insurance Corporation (FDIC) said it has transferred all deposits of the Silicon Valley Bank to a newly created bridge bank. The regulator has transferred all deposits, both insured and uninsured and assets of the former Silicon Valley Bank of Santa Clara, California, to a newly created ‘bridge bank’ to protect all depositors of Silicon Valley Bank.

The regulator said that depositors will have full access to their money beginning Monday morning, when Silicon Valley Bank, N.A., the bridge bank, opens and resumes normal banking hours and activities, including online banking.

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