Episode 0250 - The BANKS are FRAGILE but Regulations Won't FIX Anything!
The fractional reserve banking system is like an upside-down pyramid with all the deposits from people and businesses at the massive base pressing down on the tiny little tip that is our trust in the banking system and the government's FDIC program that supposedly supports it. Ask yourself how an FDIC Fund with $120 billion in it can insure deposits of over $10 trillion. Obviously, it can't. So what we're really left with is TRUST in a woefully fragile system. Join me today as we examine the underlying problems with the banking system and government institutions more broadly. We'll be using Democracy Now as a backdrop for this conversation with Mehrsa Baradaran and David Sirota who bring up some interesting questions, but in my opinion, miss the greater questions.
The collapse of Silicon Valley Bank and Signature Banks are the largest bank failures since the 2008 financial crisis, which prompted lawmakers to pass legislation to increase regulations on banks and other financial institutions. But during the Trump administration, a number of Democrats joined Republicans in Congress to weaken laws including Dodd-Frank, the landmark regulatory reform passed in the wake of the crisis. Executives from Silicon Valley Bank and Signature Bank were among those who successfully lobbied to weaken rules that may have prevented their collapse. The fallout from the bank failures now threatens to spread to other financial institutions, and the Biden administration has taken extraordinary steps to guarantee all deposits in the two failed banks and to shore up the rest of the sector in what many are criticizing as a bailout of rich bank customers. For more, we speak with _The Lever_'s David Sirota and banking law professor Mehrsa Baradaran, whom progressive groups at one point backed as the Biden administration's pick for comptroller of the currency, an influential regulator of banks.
How Silicon Valley Bank & Signature Bank Weakened Regulations That Could Have Prevented Collapse - YouTube
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