Members of the Wall Street Journal editorial board noted that, despite federal claims that it could not find a buyer for SVB, a source has told them that both the Federal Reserve and the Department of the Treasury were able to find buyers. Unfortunately, FDIC Chairman Martin Gruenberg rejected the buyers owing to the government's hostility to bank mergers. (Related: Silicon Valley Bank didn't have a risk assessment chief for 9 months as it focused on WOKE diversity policies.)
This is seemingly supported by Kevin Hassett, former chairman of the Council of Economic Advisers during the administration of former President Donald Trump. During an interview with Fox Business host Larry Kudlow, Hassett noted that people within the financial world who have intimate knowledge of the situation surrounding SVB told him that "there were buyers who were willing to step in and buy the bank, [but] the radicals at the FDIC basically weren't going to allow that to happen."
"I even heard again, someone told me this directly that was close to the situation, that the Biden administration had a whitelist of companies who were allowed to buy the failed bank and companies that weren't," he added.
Hassett called upon Congress to hold hearings to find out how the FDIC handled the reported offers.
"They're so concerned about some bank getting a little bit bigger that they have decided to put all these taxpayer monies at risk and I think it's something we've seen from the Biden administration really from the beginning. They have got a radical left agenda," said Hassett. "And it does not ever exude any common sense. So, here we are in the middle of a potential banking crisis, we've got people willing to step up to buy the company and the radical left-wingers at the FDIC won't let them do it."
The WSJ's editorial board noted that instead of letting the private sector step in to take control of SVB and prevent its collapse from contaminating the entire banking sector, the FDIC's purported solution is to bail out even uninsured bank depositors and other banks at an unknown cost to the American taxpayers.
The FDIC's Deposit Insurance Fund guarantees up to $250,000 in deposits, with the rest going uninsured. This protects normal customers and small retailers, including mom-and-pop businesses. Banks pay for this guarantee with insurance premiums. But the insurance fund isn't intended to backstop larger deposits, as it is believed these larger clients have more capacity to weather losses if a bank like SVB suddenly collapses.
Before SVB failed, the bank had around $173 billion in deposits. Anywhere between 85 percent to 90 percent of those are uninsured. The FDIC guarantees a "risk-free return" for startups and their investors could cost over $15 billion.
Biden claims none of this will be shouldered by taxpayers, and that the money to give startups and their investors their cash back "will come from the fees that banks pay" into the Deposit Insurance Fund. The White House further claims "special assessments" will be levied on other banks to recoup the losses from the insurance fund.
But it's hard to trust this administration.
Learn more about the collapse of SVB at MarketCrash.news.
Watch this clip from "Sunday Night in America with Trey Gowdy" on Fox News as he and Sen. Tim Scott of South Carolina criticize the Biden administration's response to the SVB collapse.