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13 Mar, 2023 12:00

Trump warns of new ‘Great Depression’

The former US president blames bank failures on Joe Biden’s economic policies
Trump warns of new ‘Great Depression’

The collapse of Silicon Valley Bank (SVB) was the fault of US President Joe Biden’s administration, Donald Trump has claimed, warning it could lead to a new Great Depression in the United States.

SVB, a major lender focused on tech and startups, which was the 16th largest US bank with over $200 billion in assets only a few months ago, imploded on Friday after what analysts called “a classic case of bank run.”

Alarmed over the state of the bank, depositors rushed to withdraw funds, which saw SVB’s shares crash and forced the Federal Deposit Insurance Corporation (FDIC) to shut the lender down.

“With what is happening to our economy, and with the proposals being made on the largest and dumbest tax increase in the history of the USA, times five, Joe Biden will go down as the Herbert Hoover of the modern age,” Trump wrote on his social media platform Truth Social.

“We will have a Great Depression far bigger and more powerful than that of 1929,” he continued. “As proof, the banks are already starting to collapse!!!”

A Trump spokesman later reiterated the claim, telling Business Insider that “out of control Democrats and the Biden administration have continued to pathetically try to blame President Trump for their failures with desperate lies, such as the CCP spy balloons, the train derailment in East Palestine, and now the collapse of SVB.”

“This is nothing more than a sad attempt to gaslight the public to evade responsibility,” the spokesman noted.

Meanwhile, former Democratic presidential candidate Bernie Sanders has blamed a Trump-era banking law for the SVB’s breakdown.

“Let's be clear. The failure of Silicon Valley Bank is a direct result of an absurd 2018 bank deregulation bill signed by Donald Trump that I strongly opposed,” Sanders stated on Sunday, referring to the Economic Growth, Regulatory Relief, and Consumer Protection Act, signed into law by Trump in 2018.

The legislation, which was the most significant change to US banking regulations since the 2010 Dodd–Frank Act, provided tailored regulatory relief. It exempted smaller banks from strict regulations and relaxed rules for big lenders. The asset threshold for ‘systematically important financial institutions’ was raised from $50 billion to $250 billion.

SVB ended 2022 with $209 billion in assets, which means it was no longer classified as a systematically important financial institution.

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