This time everything is different. This time they did not save banks, but the balances of bank customers. And the taxpayer didn't pay a penny. This is the line with which President Joe Biden rhetorically frames the spectacular government bailout after the second-largest bank failure in American history. The management of Silicon Valley Bank will be fired. Investors are not protected. That's capitalism.

Winand von Petersdorff-Campen

Economic correspondent in Washington.

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Biden's invocation is aimed at a grudge that many Americans have harbored since the bank bailout in the financial crisis. It is fed by the assessment that Presidents George W. Bush and then Barack Obama treated the Wall Street banks too sparingly, while homeowners across the country had to take the oath of disclosure and lost their homes. In fact, Washington backed hundreds of banks at the time, many managers remained in office, and even investors were saved from the biggest losses.

There was a window of opportunity in 2011 when left and right were united in their longing for fundamental change in the financial sector. Obama did not seize the opportunity, is a widespread assessment to this day, which is underpinned by the suspicion that the Democrat did not want to alienate the most important donor class of the party. Not only leftists criticized Obama for this, but also his successor in the presidency Donald Trump, who quite successfully accused Democrats of holding their protective hand over big city elites.

Influence of donors

For Biden, political dangers threaten from several directions. Barney Frank personifies one of them: The old driver of the Democrats had given his name to the comprehensive Dodd-Frank law, which was supposed to regulate the financial sector. Now it turns out that as a lobbyist after his political career he helped to soften the law. Not without success: Under President Donald Trump, regulation for smaller banks was defused. The relief also applied to Silicon Valley Bank and New York's Signature Bank, which was taken over by the government on Sunday to avert impending solvency.

Deregulation was pushed by Republicans, but too many Democrats voted with them, left-wing Congressman Ro Khanna now complains. He voted against it despite the fact that Silicon Valley Bank, whose boss has been busy campaigning for less stringent regulations, is in his constituency. Independent Senator Bernie Sanders, who voted with the Democrats, railed with his usual force: "To be clear. The demise of Silicon Valley Bank is the direct result of the absurd bank deregulation law of 2018 that Donald Trump enacted and which I strongly opposed. "

Barney Frank, meanwhile, defiantly remarked that it was first necessary to prove that the reform of the reform had facilitated the new banking crisis. He had no evidence for this, he told the Wall Street Journal. In fact, such a politically explosive chain of effects has not yet been clearly identified. But Frank's defense would be more robust if he hadn't been a well-endowed board member of Signature Bank for years.