Former US President Donald Trump blamed the recent bank collapse on the Joe Biden administration and warned it could plunge the US into a new great recession.
Yesterday (March 13), former President Donald Trump wrote on the social network Truth Social that: "Based on what is happening to our economy and the proposals for the strongest tax increases in the history of the country.
America, we are in danger of falling into a new great depression, much worse than in 1929. The proof is that the banks have begun to fail."
At the same time, Mr. Trump also blamed the current situation on the administration of incumbent President Joe Biden.
The warning came after the recent collapse of a series of US banks. Specifically, on March 10, Silicon Valley Bank (SVB) - the 16th largest commercial bank in the United States with assets of $209 billion was officially closed and assigned assets to the Federal Deposit Insurance Company.
United States (FDIC). The closure of the bank makes it the largest bank failure since the 2008 financial crisis and the second largest in history.
Immediately after 2 days, on March 12, Signature Bank, the largest virtual currency bank in the US and in the world, was closed by the country's authorities. This is considered the third largest collapse in the history of the US banking industry.
Also last week, on Wednesday (March 8), the second largest virtual currency bank in the US, Silvergate Bank, announced its closure. Thus, in less than a week, three US banks collapsed.
According to analysts, the fact that the US Federal Reserve (Fed) sharply increased interest rates in the past year was one of the reasons leading to the collapse of these banks.
When interest rates are near 0%, banks increase their hoard of long-term assets in the treasury, but when interest rates unexpectedly rise sharply in response to inflation, the liquidity of these assets will plummet, causing the bank to incur a loss.
US officials, including President Joe Biden, have spoken to reassure people. They confirmed that all deposits at Signature Bank and SVB will be secured. However, the Biden administration insists that this is only a measure to protect depositors and stabilize the financial system and there is no plan to rescue banks.