US President Biden is calling for the revival of banking rules watered down by Trump.

Weeks after two banks collapsed, President Joe Biden on Thursday called on independent regulators to impose tougher rules on the financial system, telling them they could operate within existing laws without further action from Congress. . The changes proposed by the White House seek to blame the Trump administration for weakening oversight of regional banks by releasing a fact sheet saying Biden's predecessor had "many of the requirements and oversight of a great deal of common sense." undermine". Shocking financial markets and American voters, California's Silicon Valley Bank and New York's Signature Bank went bankrupt over the weekend, requiring government intervention.Then another financial institution, First Republic Bank, received a $30 billion bailout from 11 major private banks.

Biden wants to revitalize and expand rules for mid-sized banks, which face less rigorous scrutiny than industry giants, and government officials say U.S. banks have since stabilized. Silicon Valley Bank collapses March 10 amid recommended changes underway.

Once banks have assets in excess of $100 billion, management requires them to hold more capital to absorb losses and undergo extensive stress testing to ensure they weather a potential crisis. They would also have to submit "living wills" to the government to help them grow in the event of bankruptcy. Additionally, Biden wants regulators to oversee banks more aggressively and ensure community banks are not responsible for topping up the Federal Insurance Fund with bank deposits.

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The public pressure is part of a larger effort by the Biden administration to protect the US economy and ensure individual bank failures can be halted without triggering a chain reaction throughout the financial system. In a speech scheduled for Thursday afternoon, Treasury Secretary Janet Yellen will stress that regulation has eased in recent years as the shocks of the 2008 financial crisis have receded, but recent setbacks have required swift government action.

"The failure of two regional banks this month shows that our deal is not over," Yellen said in a remark prepared to speak at the National Association for Business Economics conference in Washington."Regulations impose costs on businesses just as fire regulations impose costs on landlords. But the cost of proper regulation is small compared to the tragic cost of financial crises. What seemed unique about the last two bank failures was how quickly bank runs began in the digital age, jeopardizing accounts that exceeded the $250,000 deposit insurance limit. banks&039; Even holding companies have been hurt by the Federal Reserve's rate hike to curb inflation.

Yellen not only focuses on banks, but also on money market funds, hedge funds and cryptocurrencies.

"If there's one place where the system's vulnerability to runs and sell-offs has been clearly established, it's in money market funds," he said in prepared notes. Money market mutual funds had a net worth of $5.3 trillion as of February, according to the Securities and Exchange Commission.

She was also willing to call for greater oversight of digital assets and cryptocurrency, stating in her prepared remarks that "we need to identify and fill gaps in existing oversight powers over other crypto assets." Yellen noted market volatility and the collapse of FTX, a major cryptocurrency exchange that collapsed in November, leaving investors and customers in billions in losses.

Biden has also called for tougher penalties for bankrupt bank executives, including recovering damages and relaxing her ban on working in the industry.

The causes of the bank failures are still under investigation, and Yellen intended her comments to indicate that government officials should not preempt investigations that could affect regulatory changes.

The Justice Department, the Fed, the SEC and several congressional committees have announced some form of investigation into bank failures.

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lawmakers held hearings with regulators from the Fed, FDIC and Treasury Department this week. Both political parties blame Fed officials for not being quick to recognize the unique risk banks face when they hold an unusually large amount of uninsured deposits.At the same time, banks invested in long-dated government bonds and mortgage-backed securities, which fell in value as interest rates rose. One thing that made the Silicon Valley bank collapse special was the "remarkable scale and speed" of customers attempting to withdraw, Federal Reserve Vice Chairman Michael Barr said Wednesday.

Barr said that during the Fed's review of the bank's collapse, we will consider whether tighter regulation is needed, including whether regulators have the necessary tools. The Fed will also consider whether tighter rules are needed on liquidity a bank's ability to access liquidity -- and on capital requirements, which regulate the amount of funds a bank must hold.

The day before the Silicon Valley bank collapsed, customers attempted to withdraw $42 billion, sparking a frenzied rush unlike anything Barr had ever seen."We were all incredibly surprised by the massive bank panic that erupted when this happened," he said. (AP)NSA