President Joe Biden on Monday took a swipe at his predecessor Donald Trump's administration for gutting banking regulations that were created during the fallout of the 2008 global financial crisis.
The Dodd-Frank Act, passed in 2010 under then-president Barack Obama and his deputy Mr Biden, was uniformly opposed by Republicans. It required banks to hold higher levels of capital and undergo "stress tests" to assess whether they had enough capital to survive an economic shock and continue lending.
Last week, Silicon Valley Bank (SVB) collapsed following a bank run as depositors sought to withdraw funds amid concerns about its financial health.
"During the Obama-Biden administration, we put in place tough requirements on banks, like Silicon Valley Bank and Signature Bank, including the Dodd-Frank law, to make sure that the crisis we saw in 2008 would not happen again," Mr Biden said on Monday as he touted his administration's moves to ring-fence the SVB crisis.
"Unfortunately, the last administration rolled back some of these requirements. I'm going to ask Congress and the banking regulators to strengthen the rules for banks."
One of the many bankers lobbying for an easing of Dodd-Frank was the SVB chief executive Greg Becker.
“The evidence is clear that the Dodd-Frank Act’s framework for [larger, global banks] is not appropriate for SVB and our peers,” Mr Becker said in 2015 to the powerful Senate Banking Committee.
“The costs are not just high for us, but for our customers.”
Mr Becker was only one in a legion of executives from smaller and mid-sized banks, collectively known as regional lenders, who made a similar case that ultimately succeeded.
“One size fits all — those rules just don’t work,” Mr Trump said at the White House in 2018, as he celebrated the removal of “crippling” rules.
“They shouldn’t be regulated the same way as the large complex financial institutions, and that’s what happened and they were being put out of business one-by-one.”
Mr Biden on Monday said it was time to reinstate banking regulations aimed at avoiding further collapses.
"I'm going to ask Congress and the banking regulators to strengthen the rules for banks to make it less likely this kind of bank failure will happen again, and to protect American jobs as a small business," Mr Biden said.
But he faces a divided Congress, which could make passing tougher new rules difficult, though Republicans and Democrats alike have criticised Silicon Valley's bank managers.
“I have no doubt that if this bank had been subject to the much tougher regulation that they would not have been allowed to buy long-term Treasuries and long-term debt instruments insured by the federal government — basically, mortgage-backed securities,” said Brad Sherman, a Democratic congressman from California.
“They would have been pushed to buy short-term instruments and we wouldn’t be having this conversation."
Bloomberg contributed to this report