Hi friend, 

Crazy month. It began with the financial industry’s Republican allies on the Senate Banking Committee pushing Federal Reserve Chair Powell to stop Vice Chair for Supervision Barr from properly regulating banks (which we rebutted here) and ended with high-profile Congressional hearings into the failure of Silicon Valley Bank (SVB), which happened because banks weren’t properly regulated (as we detailed here).

Yes, the directors and executives of SVB were, at best, grossly deficient, but, no shock, bankers prioritize profits and often engage in high risk, dangerous, reckless, and sometimes illegal conduct (after all, that’s what generates the biggest pay packages!). That’s why we have banking regulators like the Federal Reserve: to make sure banks/bankers don’t put profits above safety, soundness, and financial stability.  Unfortunately, during the Trump administration the financial industry was significantly unleashed, unsupervised, and unpoliced.  SVB’s collapse and the ongoing banking crisis was the inevitable and predicable result of Trump’s regulators deregulating and gutting supervision – it was also entirely avoidable, all as we spelled out in our latest fact sheet. I hope you take a few minutes to read it.

For Better Markets, the SVB failure is a galvanizing moment that shows the importance of our work and the need to do even more. As our Fact Sheet shows, for years we warned of the dangers of deregulation of banks like SVB, spelled out the dangers of those actions, and detailed how to change all that.  In just the last several months, we issued a report on how the Fed’s post-2008 policies have created enormous risks in the system (as widely praised here and here).  Unfortunately, those risks have now materialized and contributed to SVB’s failure. We have been very active this month in the media raising and discussing all these issues:

Dennis Kelleher was interviewed on CNN, Bloomberg TV, ABC World News Tonight, NPR and other outlets to explain the SVB failure. Watch a compilation of his appearances here.

These fast moving and incredibly consequential issues will continue to command our attention.  If you want to keep up in real time, our website (www.bettermarkets.org) is a great resource and you should also follow us on Twitter @BetterMarkets and @DennisKelleher for our latest work and thoughts.

Our generous supporters have—once again—allowed us to speak the truth about the growing dangers to our financial system, despite efforts by financial firms, their lobbyists, and many powerful allies to silence us and prevent us from promoting the public interest over their special interests. Together in this critical moment we will continue to demand accountability from whose who jeopardize our financial system and the well-being of Main Street families, small businesses, and community banks.

Best,

Dennis

Dennis Kelleher
Co-founder, President, and CEO of Better Markets

The Better Markets team is closely following Silicon Valley Bank’s failure and the rapidly developing implications for our financial system. Below are key materials and coverage Better Markets has received during the past few days. You can also find our work in recent months that outlined the very issues that led to the bank’s failure and the resulting turmoil.

Ahead of Federal Reserve Board Chairman Powell testimony in front of the Senate Banking Committee on March 7, we wrote him a letter asking him to reject calls by the Senate GOP to interfere with Vice Chair Barr’s ongoing review of banks’ capital cushions. We were responding to a letter sent to Powell by Republican Senators on the Banking Committee expressing ‘concerns’ about the thorough, comprehensive, data-driven analysis of capital by Barr.

The CFTC should investigate the role and impact of financial speculators in the commodities markets. Skyrocketing prices in commodity markets are driving financial speculators’ historic profits and bonuses. That money is coming directly out of the pockets of American families as the prices for gas, cereal, bread, and other everyday commodities continue to increase while also being highly volatile.

One of the financial industry’s favorite weapons to beat back even the most sensible and necessary financial protection rules is so called “cost-benefit analysis,” which is often no more than “industry cost only analysis” that leaves the public interest out.  We have fought this for years and have just released a new report, “The Ongoing Use and Abuse of Cost-Benefit Analysis in Financial Regulation,” explaining again that, while cost-benefit analysis may have an intuitive appeal, it is inaccurate and biased, placing too much weight on industry’s easily quantified costs and too little on the enormous but often harder to calculate benefits that rules provide to hard working Americans.

Crises don't just happen — they’re not like the Immaculate Conception.

– Dennis Kelleher in The New York Times

March 6
Fed's Powell faces Wall Street firing line on Capitol Hill 

March 8
Ex-Goldman Banker’s Prison Term Previews What Former Boss Faces 

March 13
Was This a Bailout? Skeptics Descend on Silicon Valley Bank Response.

March 16
Experts, banks look for ideas to stop next bank failure

Each month our legal team outlines some of the top cases we're keeping an eye on, the Amicus "Friend of the Court" Briefs we have filed, and why everyone with a bank account, credit card, mortgage loan, or retirement loan should be interested in those cases.  

Our government affairs team closely tracks important legislation and works with members of Congress, their teams, and Congressional committees to ensure financial reform issues are a priority. 

Ahead of a House Financial Services Committee hearing on digital assets, Better Markets released an updated Fact Sheet on crypto, FTX’s collapse, SBF’s activities, the actions of the SEC, CFTC, and banking regulators on crypto, and the crypto industry’s use of the revolving door in their influence campaign in Washington.