Signature and Silicon Valley Bank Collapses Followed Softened Regulation

The legislation followed years of pressure from bank executives and lobbyists, including Greg Becker, who until Friday ran Silicon Valley Bank.

“Without such changes, S.V.B. likely will need to divert significant resources from providing financing to job-creating companies in the innovation economy,” Mr. Becker warned lawmakers in 2015.

Harris Simmons, the chief executive of Zions Bancorporation in Utah, was another trying to get out from under what he viewed as onerous federal supervision. He said that regional banks like his posed little, if any, threat to financial stability and that tough regulations were crimping their ability to serve customers.

“If regulations on regional banks were eased, those banks would have additional capital — as much as $4 billion each year — to lend,” Mr. Simmons wrote in American Banker magazine in 2017. To bolster his case, he cited Mr. Frank’s support of raising the $50 billion threshold.

Zions, which has more than 100 branches in three states, is now among the banks being pummeled by anxious investors. Its shares sank about 25 percent on Monday. A Zions spokesman did not respond to a request for comment.

Supporters of the 2018 changes said they still made sense, even as a new crisis unfolded. “These mid-sized banks needed some regulatory relief,” Senator Mark Warner, Democrat of Virginia, said on ABC News on Sunday.

In the interview on Monday, Mr. Frank said the legislation’s goal had been to focus on the country’s very largest banks and not to saddle smaller institutions with stringent rules or oversight.

Article source: https://www.nytimes.com/2023/03/13/business/signature-silicon-valley-bank-dodd-frank-regulation.html