The House Freedom Caucus said in a statement on Monday that they oppose bailing out the banking industry for what should be considered a failure of regulators not to see the coming crisis.
“The House Freedom Caucus continues to stand for the forgotten men and women of America, and Americans are done with government bailouts — especially when caused by the government’s own policies, apparent regulatory failures, and clear management ineptitude,” the group of conservative House lawmakers said in a written statement.
The House conservatives contended that rampant spending under President Joe Biden and “mismanaged” monetary policy by the Federal Reserve created the conditions for the banking crisis that started with the collapse of Silicon Valley Bank. They also called for the Fed to end its “Bank Term Funding Program,” a program
by the Fed to ensure banks can meet the needs of depositors, although some detractors may call it a bailout.Out-of-control spending in Washington and Federal Reserve interventions have fueled skyrocketing inflation. Having mismanaged interest rate policy and their own balance sheet, the Federal Reserve reacted by rapidly increasing interest rates after keeping them artificially low for far too long.
The Federal Reserve must unwind its extraordinary “Bank Term Funding Program” as soon as possible. Any universal guarantee on all bank deposits, whether implicit or explicit, enshrines a dangerous precedent that simply encourages future irresponsible behavior to be paid for by those not involved who followed the rules.
The lawmakers wrote that this crisis was also born out of a failure of regulators, not of regulations. They said they would oppose efforts by Democrats to undo the Trump banking reform that rolled back Dodd-Frank regulations for small and medium-sized banks.a political target for Democrats and Republicans, both contending that the San Francisco Fed failed to address the “risky structure” of Silicon Valley Bank, as explained by Sen. Ted Cruz .
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