By Ovunc Kutlu
ISTANBUL (AA) - US President Joe Biden urged regulators Thursday to reverse banking rules imposed by his predecessor Donald Trump which he said weakened supervision of large regional banks.
"Unfortunately, Trump Administration regulators weakened many important common-sense requirements and supervision for large regional banks like Silicon Valley Bank and Signature Bank, whose recent failure led to contagion," the White House said in a statement.
"The President believes that the weakening of common-sense bank safeguards and supervision during the Trump Administration for large regional banks should be reversed in order to strengthen the banking system and protect American jobs and small businesses," it added.
The sudden collapse of Silicon Valley Bank and Signature Bank in addition to financial difficulties surrounding Silvergate Bank and First Republic Bank in recent weeks ignited turmoil in the banking sector of the world's biggest economy.
In response, Biden urged the federal banking agencies, in consultation with the Treasury Department, to consider a set of reforms that will reduce the risk of future banking crises.
The proposed reforms include liquidity requirements and stress testing for banks with assets between $100 billion to $250 billion, imposing strong capital needs for banks, expanding long-term debt requirements to a broader range, and strengthening supervisory tools to ensure banks can withstand high interest rates.