Retired congressman Barney Frank, who co-wrote the Dodd-Frank Act which aimed to fine tune bank regulations following the 2008 financial crisis, has come under fire amidst the latest banking collapse in The United States.
Barney is on the board of directors at Signature Bank, who are a New York lender that was shut down by state regulators over the weekend. Signature Bank became the 3rd bank to collapse following Silicon Valley Bank, which was shut down on Friday, and Silvergate Capital, which was shut down the previous week.
Frank spoke to Bloomberg on Friday and argued that some of the blame should lie with crypto currencies, which weren’t in existence when he and other lawmakers were dealing with the Lehman Brothers collapse in 2008.
“Digital currency was the new element entered into our system,” Frank told Bloomberg. “A new and destabilizing – potentially destabilizing – element is introduced into the financial system. What we get are three failures.”
Frank didn’t discuss crypto’s role in helping Signature Bank grow, despite concerns about its volatility.
Frank also insisted that regulators’ move to shut down Signature was hasty, claiming that the bank could have survived.
“I think that if we’d been allowed to open tomorrow, that we could’ve continued — we have a solid loan book, we’re the biggest lender in New York City under the low-income housing tax credit,” Frank said. “I think the bank could’ve been a going concern.”
“Mr. Frank’s extensive experience as a congressman, and particularly as Chair of the House Financial Services Committee, led the Board to conclude that he should be a member of the Board,” a statement about Frank’s appointment to the board reads.
As of February 2023, Frank owned 5,542 shares in Signature Bank, which at the time were worth $825,000. The value of the shares will have diminished following the bank entering administration.
ARTICLE: PAUL MURDOCH
MANAGING EDITOR: LUKE MOCHERMAN
PHOTO CREDIT: NEW YORK POST
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