Silicon Valley Bank Collapse Becomes Campaign Topic as GOP Warns Against Bailout

wsj.com:

The sudden collapse of Silicon Valley Bank has set the stage for the latest fight over the role of the federal government in the financial sector, with Republican 2024 presidential hopefuls threatening to make any hint of a taxpayer-funded bailout a campaign issue.The issue’s clout and staying power will likely depend heavily on whether regulators are able to successfully shield the banking system from wider fallout, and by how losses are dealt with for depositors with holdings above the Federal Deposit Insurance Corp.’s $250,000-protection limits.Nikki Haley, the former South Carolina governor and United Nations ambassador running for the GOP nomination, was among the first in the still-emerging GOP field to call for no taxpayer exposure to the bank’s failure and by Sunday was already soliciting online campaign contributions on the topic.“Taxpayers should absolutely not bail out Silicon Valley Bank,” she said in a statement. “Private investors can purchase the bank and its assets. It is not the responsibility of the American taxpayer to step in. The era of big government and corporate bailouts must end.”

Treasury Secretary Janet Yellen said Sunday there are no plans for a bailout following the bank’s Friday failure, while highlighting reforms that have been put in place since the 2008-2009 financial crisis.“We’re not going to do that again,” she said on CBS News. “But we are concerned about depositors and are focused on trying to meet their needs.”