Sen. Elizabeth Warren: 'I wish I'd been wrong' predicting SVB collapse


Sen. Elizabeth Warren (D-Mass.) wrote a scathing opinion essay for The New York Times on Monday, saying "we know who is responsible" for last week's stunning collapse of Silicon Valley Bank and ensuing financial fallout.
"In the aftermath of the 2008 financial crisis, Congress passed the Dodd-Frank Act to protect consumers and ensure that big banks could never again take down the economy and destroy millions of lives," wrote Warren, whose political reputation has been predicated in large part on fighting corporate greed. That law, however, was defanged in 2018 under then-President Donald Trump following intense lobbying pressure from various Wall Street and banking interests including, Warren pointed out, "Greg Becker, the chief executive of Silicon Valley Bank."
Indeed, one of the crucial rollbacks enacted by Trump was raising the threshold of how much money a bank possessed before it was considered "too big to fail" and thereby requiring certain regulatory oversight. Now sitting comfortably below the limit of $250 billion, SVB was therefore subject to fewer regulations over the past five years, leading to what Warren deemed "a toxic mix of risky management and weak supervision." This included relying largely on startups as its main batch of depositors — a move that left the bank particularly vulnerable to the economic flux of a single industry, rather than diversifying its stakeholder group.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
"Had Congress and the Federal Reserve not rolled back the stricter oversight," Warren said, Silicon Valley Bank "would have been subject to stronger liquidity and capital requirements to withstand financial shocks." And while the damage in this particular instance is done (although the Biden administration has vowed to cover deposit insurance above the usual $250,000 limit for bank customers), Warren nevertheless proposes a series of steps to prevent the next medium-size bank meltdown from occurring. Her suggestions include returning to Dodd-Frank-levels of regulation, amending deposit insurance rules to better protect payrolls and ordinary banking transactions, and — perhaps most importantly — ensuring that "those responsible not be rewarded" with the government empowered to not only "claw back" excessive executive bonuses, but also investigate potential civil and criminal lawbreaking on the part of those at the top of SVB.
"These bank failures were entirely avoidable if Congress and the Fed had done their jobs and kept strong banking regulations in place since 2018," Warren concluded, warning "Washington must act quickly to prevent the next crisis."
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Rafi Schwartz has worked as a politics writer at The Week since 2022, where he covers elections, Congress and the White House. He was previously a contributing writer with Mic focusing largely on politics, a senior writer with Splinter News, a staff writer for Fusion's news lab, and the managing editor of Heeb Magazine, a Jewish life and culture publication. Rafi's work has appeared in Rolling Stone, GOOD and The Forward, among others.
-
Flying into danger
Feature America's air traffic control system is in crisis. Can it be fixed?
-
Pocket change: The demise of the penny
Feature The penny is being phased out as the Treasury plans to halt production by 2026
-
Time's up: The Democratic gerontocracy
Feature The Democratic party is losing key seats as they refuse to retire aging leaders
-
Grocery stores under fire for overcharging during cost-of-living crisis
The Explainer A recent investigation has put the spotlight on Kroger, but it is not the only chain being pinpointed
-
Crypto firm Coinbase hacked, faces SEC scrutiny
Speed Read The Securities and Exchange Commission has also been investigating whether Coinbase misstated its user numbers in past disclosures
-
Starbucks baristas strike over dress code
speed read The new uniform 'puts the burden on baristas' to buy new clothes, said a Starbucks Workers United union delegate
-
Visa wants to let AI make credit card purchases for you
The Explainer The program will allow you to set a budget and let AI learn from your shopping preferences
-
Warren Buffet announces surprise retirement
speed read At the annual meeting of Berkshire Hathaway, the billionaire investor named Vice Chairman Greg Abel his replacement
-
Trump calls Amazon's Bezos over tariff display
Speed Read The president was not happy with reports that Amazon would list the added cost from tariffs alongside product prices
-
Trump tariffs: five scenarios for the world's economy
The Explainer A US recession? A trade war with China? How 'Liberation Day' could realign the globe
-
Markets notch worst quarter in years as new tariffs loom
Speed Read The S&P 500 is on track for its worst month since 2022 as investors brace for Trump's tariffs