Sen. Ted Cruz (R-TX) slammed the Biden administration’s bailout of Silicon Valley Bank this week, warning that it will incentivize future bad behavior from banks.
Cruz made the comments Wednesday on his podcast “Verdict,” with co-host Ben Ferguson, while discussing the ripple effect that the collapse of the bank has had on the U.S.
“It’s called into question a lot of the financing for venture capital, and it has potentially imperiled a significant number of mid-sized banks,” Cruz said at the start of the show. “In response to this, the Biden administration rolled out a major bailout, conveniently bailing out the politically connected friends of the Biden White House in a way that will have lasting repercussions for the economy, and will almost certainly incentivize future bad conduct by other banks.”
Several minutes later, Cruz expanded on his remarks, noting that there were a lot of people who were going to look at what the Biden administration did by bailing out a bank that backed woke initiatives and believe that they can get away with the same reckless behavior as long as they align with the political Left.
“They were gambling that the Fed would not raise rates even though they’d been screaming from the mountaintops that they were going to raise rates,” Cruz said. “A bank that is being prudent can hedge its investments against interest rates rising by investing also in counterbalancing investments that will go up when interest rates go up. They didn’t do that! They were focused on virtue signaling. They were focused on showing just how woke they are.”
“These bank officers were bad actors,” Cruz continued. “Let me let me tell you two data points that have been vastly underreported. Number one, hours before the bank was shut down Silicon Valley Bank gave very substantial bonuses to all of its employees. They just began writing checks to everyone hours before they were shut down. Data point number two: in the two weeks prior to their being shut down, the CEO and the CFO sold large amounts of stock. The CEO ended up making over a $2 million profit from selling stock less than two weeks before the bank was shut down. Both of those indicate corrupt intent.”
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“I’ll tell you I had a conference call in the last 48 hours with all 100 Senators were invited to participate and Treasury and the FDIC was on there and I asked I said, ‘Look, is it true that they gave bonuses to their employees, number one? If so, I think it is outrageous. And number two, has there been any investigation into clawing back those bonuses?’” Cruz continued. “As far as I’m concerned, this is like Bonnie and Clyde. They’re robbing the bank as they know their customers’ deposits are about to get blown up. And much of the media coverage has ignored the exceptionally bad conduct by the bank’s officers.”
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