Biden’s Bank Bailout: Encouraging ‘Moral Hazard’
Some people pay little attention to risk because they enjoy benefits if things turn out well, but others pay if things go badly (“Yellen: ‘The system remains sound,’” March 17). This indicates a “moral hazard.”
Unfortunately, the Biden administration seems to embrace and encourage moral hazard.
Examples are canceling student loans, bailing out the Teamsters multi-state pension plan and making large depositors in Silicon Valley and Signature banks whole.
All of these policies encouraged some people to take excessive risks and game the system, often at the expense of taxpayers. Why be cautious when someone else pays for your mistakes?
James E. Ciecka
Chicago, Ill.
Of course the depositors at SVB will be covered beyond the $250,000 that the FDIC insures if banks fail.
If the bank was a conservative-leaning bank located in, say, Cheyenne, Wyo., instead of Santa Clara, Calif., do you think the decision to cover the losses would be the same?
If the recent poisonous train wreck had occurred in San Francisco, Calif., instead of East Palestine, Ohio, how long would it have taken for the president to visit? Hours? Steven Mendelsohn
Whitestone
With a focus on advocating for a “safe space” for LGBTQ employees, Jay Ersaph, the head of risk management at SVB, failed to focus on a “safe space” for the bank’s money (“The risk of ‘woke’ banking,” Douglas Murray, March 17).
Furthermore, some bank executives sold their stocks in advance of public knowledge of the impending crises.
The bank doesn’t deserve a bailout. It should not be immune from litigation, and executives who sold stock using knowledge of impending failure should not be allowed to keep the money, while the FDIC is on the hook for billions.
Mel Young Boca Raton, Fla.
Everyone remain calm: Everything will be OK. President Biden and Treasury Secretary Janet Yellen have everything under control.
Please remember these are the same people who assured us in early 2021 that inflation was “transitory.” Bruce Collins
Middletown, NJ
The collapse of Silicon Valley Bank and Signature Bank are a dire warning that our entire banking system and economy are in peril.
Biden’s policies are to blame for this latest fiasco. Of course, he will accept no responsibility and will instead blame Congress, former President Trump, Republicans and anything else that comes to mind.
Biden’s entire administration has engaged in the most reckless fiscal policies imaginable, and the effect has had devastating consequences on the working people of this country. It’s terrifying to think what kind of shape our country will be in after two more years of this incompetent president. Robert DiNardo
Farmingdale
With the recent failure of Silicon Valley Bank, we are now deeply concerned about all our financial deposits with the possibility of a new total bank failure that may effect our holdings.
New start-ups may have difficulty obtaining funding for their projects and mortgage rates may remain high, making it difficult for first-time home buyers.
It seemed only a few short years ago that our financial future looked safe and promising. Today, we are faced with large layoffs from prominent US corporations, forcing high-paid ex-employees to compete with each other for lower-paying jobs
With the possibility of a pending recession, how should we adjust our financial investments with the goal of holding their current value or accepting a diminish return?
Bob Sweeney Warwick, RI