Sen. Ted Cruz (R-TX) criticized this week’s bailout of Silicon Valley Bank by the Biden administration and warned that it will encourage other unethical banking practices.
Cruz made these remarks on his podcast “Verdict,” with his co-hosts Ben Ferguson, on Wednesday while discussing the repercussions that the bank’s failure has had on the United States.
Cruz noted at the beginning of the show, “It’s called into question a lot of the venture capital financing, and it’s potentially endangered a big number of mid-sized banks. The Biden administration responded by implementing a significant bailout, conveniently helping out the politically well-connected allies of the Biden White House in a way that would have long-term effects on the economy and virtually probably encourage such unethical behavior by other banks.”
A few minutes later, Cruz elaborated on his points, saying that many individuals would think that they could get away with the same irresponsible behavior as long as they sided with the political Left because of what the Biden administration had done in rescuing a bank that supported awakened policies.
“Even though the Fed had been shouting from the mountaintops that it will hike rates,” Cruz claimed “that they were betting that the Fed would not do so. A bank can protect its investments against rising interest rates by making counterbalancing investments that will increase in value as interest rates rise. That wasn’t what they did! They concentrated on praising themselves. They were concerned with demonstrating their level of awakening.”
Cruz stated, “These bank employees were horrible actors. Let me share with you two statistical items that have received much too little attention. First off, Silicon Valley Bank offered all of its workers very sizable bonuses just hours before the business was closed. A few hours prior to closing down, they suddenly started sending cheques to everyone. Second data point: The CEO and CFO sold a lot of stock in the two weeks before they were shut down. It was less than two weeks before the bank’s closure, when the CEO sold stock for a profit of over $2 million. Both of those point to malicious intent.”
I’ll admit that I just participated in a conference call with all 100 Senators, Treasury, and the FDIC, and during that call, I questioned, Look, is it true that they awarded bonuses to their staff, number one? If so, I find it revolting. Second, has the matter of taking back those bonuses been looked into?” Cruz went on. “In my opinion, this is similar to Bonnie and Clyde. They are looting the bank since they are aware that the deposits of their clients are soon to be destroyed. Also, the extraordinarily poor behavior of the bank’s officers has received little attention in the media.”