This article comes from IntelligencerThis article comes from

, the original author: Jen Wieczner, compiled by Odaily translator Katie Ku.

The sudden spate of bank failures over the past week has brought back painful memories for many bankers of the 2008 financial crisis. After Silicon Valley Bank "crashed" on Friday, Wall Street and other financial institutions are trying to figure out what went wrong and why regulators ignored the warning signs.

On the eve of Sunday's Oscars, New York regulators announced they had shut down and "taken over" Signature Bank, a Manhattan-based institution whose clients include some of the largest cryptocurrency companies, including players in the New York real estate market. client.

The news caught almost everyone off guard, including Barney Frank, a former congressman and architect of the landmark Dodd-Frank banking system regulations, who also happens to be on Signature’s board. In the latest banking crisis, it is too ironic that the man who had put banks on the radar of financial regulators is now in the muddy waters of bank failures.The media alluded to Barney Frank having a "Lehman moment," too. Barney Frank was quick to suggest that Signature was the victim of a political attack, telling CNBC on Monday: “The regulators want to send a very strong anti-encryption signal.” New York’s Department of Financial Services (DFS) pushed back on Tuesday. , and told Bloomberg: "It has a crisis of confidence" in the bank's leadership. But in a new interview with The New York Times, Barney Frank disputes that notion, speaking at St. John's, explaining why heBlaming Regulators for Unreasonably Closing Signature Bank, and What He Really Thinks of Crypto Banks

The following is an exclusive interview with Barney Frank.

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Who is to blame for the collapse of Silicon Valley Bank?I can only tell you from the perspective of Signature,

Silicon Valley Bank irrationally triggered a deposit run at Signature Bank. Because whatever Silicon Valley Bank has in high tech and cryptocurrency, we don't have. We're not a big tech lender. We are a large home lender in New York City that deals more with commercial real estate. We do not hold cryptocurrencies as our own assets. We simply allow two of our clients to trade each other in cryptocurrencies, and we act as the "matchmaker" of the transaction.

But we have large depositors with well over $250,000 in large deposits. This is because our client base is made up of major real estate owners. Years ago, when we created the original Dodd-Frank Act, I wanted to expand deposit guarantees to businesses that had to have a lot of cash on hand. For various political reasons, I couldn't make it. So you have also seen that Silicon Valley is experiencing "Waterloo". Some people think we are a crypto bank; second, we have large uninsured deposits. So they panicked and started divesting. That's what happened on Friday afternoon.If the FDIC and the Federal Reserve had moved ahead, we wouldn't have had any trouble.

Second, if they had allowed us to open on Monday, we would have been fine, we would have continued to operate. The closure of Signature Bank surprised many as it initially appeared to be unaffected by the Silvergate bank run earlier this year. Silvergate is a California-based bank primarily serving the cryptocurrency industry.If these two FSA announcements send positive signals to the market, we will remain a going concern bank.

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I think this may be to send a message that while we are conscientiously doing crypto business, regulation does not want banks to be in crypto business. They denied this in their statement. I think they're overreacting to the data problems they're seeing, which may be there, but the data is improving. I don't think sloppy numbers are a reason to close a bank that hasn't been deemed insolvent, and they never said we were insolvent.

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Is it legal for the government to take over any bank directly (even if it is not bankrupt)?

That’s why I speculate that the government is using us as an example to send a strong “stay away from cryptocurrency” signal to the market.

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There are no early warning signs. In mid-February, I attended a meeting with regulators. There was nothing to suggest that we were in danger of being shut down. There was no indication of this at the time. It's hard to imagine what happened in a week.

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I don't think they need to do this. But I think banks are already starting to exit the cryptocurrency industry. Regulatory "killing chickens to scare monkeys" may have worked.

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I think it is wrong to say that it is impossible for a bank to be in the cryptocurrency business. We used a reasonable approach, and we did not rely on the value of the cryptocurrency, but only facilitated the transactions of other customers. I've always been skeptical of cryptocurrencies in general. I think cryptocurrencies need to be regulated more strictly, but not by the banks, it should be regulated by the SEC and the Federal Reserve.

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There's a lot of talk about the 2018 Dodd-Frank Act being less powerful than it once was, with U.S. Senator Elizabeth Warren blaming the recent failures of banks like SVB on it. Do you agree?

Congress has raised the amount that is subject to scrutiny, but I don't think there will be "missing nets" and they will still be regulated. I was on the Signature Board of Directors both before and after the Act went into effect. I can assure you that regulation has not weakened. In fact, New York State stepped in, they were not affected by the 2018 bill. They have all the power they had in 2013 in 2019.

• From my personal perspective, my conclusion in 2012 that $50 billion (the minimum amount of assets required for a bank to comply with Dodd-Frank) was too low and arbitrary. So I gave a speech at a Fed meeting in Chicago in 2013 and said two things.

• We have to raise $50 billion. Others may think I'm only trying to do this now to help Signature out of its current predicament. But two years before I heard about Signature, I publicly announced that I was going to raise $50 billion.

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I think regulation has always been there. One may wish for more action from regulators. Regulation may not be as tough under Trump. I do think that if stricter regulation is needed, they have the right to do so. Their measures in 2018 did not weaken the powers of the banking regulator. They removed the "extraordinary attention" requirement for mid-sized banks, but they still have the power to take action if any problems are found. Other than raising the FDIC's level of deposit guarantees, no one pointed to me legislative reforms to require more banking regulation.

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Do you feel that the $250,000 FDIC insurance limit is no longer enough to meet the needs of the current market?

It used to be $100,000. In 2008, in response to the financial crisis, the FDIC temporarily removed subsidies to businesses so they wouldn't divest when banks failed. In fact, if you don't have insurance, you can go to the largest bank and withdraw money. That's good for JPMorgan and Bank of America, but bad for everyone else.

When we make the bill, I want to carry over the previous regulations. I don't have exact numbers, but I do hope that businesses with cash, including those with payroll needs, will have adequate coverage so they don't have to withdraw money during the panic, but I've failed. The biggest banks and their political influencers want to keep insurance limits low. The lower the guarantee, the more competitive they think they are. And I want to change it.