“Instead of regulating, they took their eye off the ball and were focused on the green hallucination and pursuing the Democrats’ dream”
U.S. SENATE – U.S. Senator Steve Daines, a member of the Senate Banking Committee, today delivered the following remarks at the weekly Republican Senate Leadership press conference slamming federal regulators’ focus on climate change rather than the Federal Reserve’s dual mandate and said that along with inflation it contributed to the banking crisis. Earlier today, at a Senate Banking Committee hearing, he questioned banking regulators on the recent bank failures and the federal regulatory response.
“So, this morning the Senate Banking Committee at a hearing we had one of the top regulators from the Federal Reserve. We’re questioning him about Silicon Valley Bank failure. Banking is about managing risk, whether it’s making a loan, you’re always looking at risk. If you’re on the management team of a bank, you’re looking at risk, looking at the balance sheet. You’re looking at your assets, looking at vulnerabilities.
“Go back to early 2021. We were debating up here on Capitol Hill whether or not we should pass a massive $1.9 trillion spending bill. Every single Democrat voted for it. Every Republican voted against it. Why? Well, there were a lot of reasons, but one of the reasons is because it was going to create inflationary pressures on the economy. Lawrence Summers, who was President Clinton’s Secretary of Treasury, also one of President Obama’s key advisors on the economy, was warning Democrats then about what this would do in terms of igniting inflation in the economy. Sadly, the Democrats didn’t listen because Lawrence Summers was right. So, what did the Federal Reserve have to do? They started to raise rates to combat this out-of-control inflation. That creates risk.
“Now the San Francisco Fed, who’s responsible for regulating the Silicon Valley Bank, they were asleep at the wheel. Instead of regulating, they took their eye off the ball and were focused on the green hallucination and pursuing the Democrats dream. In fact, you go back to October of ’22, as rates were starting to go up to the, the San Francisco District said, ‘Here’s what’s top of mind for our work in the 12th District”, taken right off their website. It says, “financial risks from climate change”.
“That was the focus, the focus of the regulators. Meanwhile, you contrast that to the Richmond Fed over here in the 5th District, the other side of the country. They at the same time were saying, “rising rates and interest rate risk management was the key, key priority.’ This was then the perfect storm.
“Regulators took their eye off the ball. They missed the real risks of rising interest rates, decreasing bond values, liquidity challenges, because they were telling everybody it’s all about the risk of climate change.”