Below is the opening of our monthly newsletter. View the full newsletter online here.
Too often after a crisis and the wave of media attention that follows, everyone moves on to the next story without truly understanding what happened and how we can prevent it from happening again. Sometimes that’s just media shortsightedness, but often it is an intentional strategy to serve the ends of those who do not want to be held accountable or who do not want change, no matter how important that change would be. In this case, the financial industry and its allies are already shifting the conversation about the banking crisis precipitated by the collapse of Silicon Valley Bank and trying to limit the blame to a few reckless executives and incompetent regulators.
But we’re not letting the conversation move on quietly without fighting for real change that better protects Main Street families, workers, small businesses, and community banks. While there’s lots of blame to go around and everyone could have done better, we know that the actual causes of the crisis were predictable. The combustible mix of weaker rules enacted during the Trump administration and deficient supervision by the banking agencies incentivized bank executives to take excessive risks and engage in irresponsible and reckless behavior. The good news is that the actions necessary to change this are well known, not particularly complicated, and the least costly option.
We need policymakers and regulators to act now to prevent the next crisis with the same level of urgency and decisiveness that they acted to respond to the crisis once the banks started collapsing. Responding with multi-year rulemakings that the financial industry will aggressive oppose guarantees another crisis if not crash before any meaningful response to the last crash. That will sow the seeds of the next crash and virtually guarantee that it’ll be worse than the last one. The American people can’t afford that and deserve better. Now is the time to hold Wall Street and regulators accountable, strengthen the banking system, and protect Main Street.
On a closing note, Better Markets is moving! After 13 years, this is the last month in our K Street office. Our new office will be located at 2000 Pennsylvania Avenue NW, Suite 4008, Washington, DC, 20006.
Co-Founder, President & CEO, Better Markets