DeSantis' Banking Record Raises Questions Amid SVB Crisis

Strategic Insights -

Florida Gov. Ron DeSantis' criticism of Silicon Valley Bank's diversity initiatives and federal regulators has raised questions about his own record on banking regulations. In 2018, DeSantis voted for a bill that loosened oversight of mid-size banks, including Silicon Valley Bank, which collapsed recently, sending shockwaves through the financial system. DeSantis' past calls for a more laissez-faire approach to banking contrast with his recent moves to punish banks that consider factors like the environment and social good in their investment and lending strategies.

Key Takeaways:

  • DeSantis voted for the 2018 law that loosened oversight of mid-size banks, including Silicon Valley Bank, which had $209 billion in total assets at the end of 2022.
  • The 2018 law raised the asset threshold for tougher supervision by federal banking regulators from $50 billion to $250 billion, making Silicon Valley Bank eligible for less stringent regulations.
  • DeSantis' office declined to comment on his 2018 vote, despite criticism from his recent comments on the SVB collapse.
  • DeSantis' record on banking regulations is a potential liability as he considers a presidential campaign, with other 2024 candidates, including Trump, Scott, Cheney, and Noem, having also supported the 2018 law.
  • DeSantis has called for a more laissez-faire approach to banking, contradicting his recent moves to punish banks that consider environmental and social factors in their investment and lending strategies.
  • Unsaid in DeSantis' criticism is Florida's financial ties to SVB, with the state's pension system having $1.7 billion invested in funds managed by SVB Capital.

Statistics:

  • $209 billion: Silicon Valley Bank's total assets at the end of 2022.
  • $250 billion: The new asset threshold for toughness supervision by federal banking regulators, established by the 2018 law that DeSantis voted for.
  • $100 million: The threshold for periodic stress tests under the 2018 law.
  • $1.7 billion: Florida's pension system's investment in funds managed by SVB Capital, as of last June.

Sources:

  • CNN
  • Federal Deposit Insurance Corporation (FDIC)
  • 2018 law (exact title not specified in the source)
  • Fox Business Network
  • Senate committee hearings and testimony
  • New York Post article citing Rupert Murdoch's media empire
  • Florida's State Board of Administration
  • FDIC chair Sheila Bair's interview with CNN This Morning