Wednesday 15 March 2023

Newsom hailed the Silicon Valley Bank bailout, but did not point out his own business with the institution: Report

 The Intercept reports that while California Gov. Gavin Newsom, a Democrat, has expressed support for the bailout of Silicon Valley Bank depositors, the Golden State governor failed to point out that he is a client of the belly-up bank.

Linking to a document titled "Silicon Valley Bank Wine Division Premium Wine Client Promotions," the Intercept claimed that wineries owned by the governor — CADE, Odette, and PlumpJack — are listed as clients. Newsom kept personal accounts at the bank for years, according to a former Newsom employee, the outlet said.

"Governor Newsom's business and financial holdings are held and managed by a blind trust, as they have been since he was first elected governor in 2018," Newsom spokesperson Nathan Click said via email, according to The Intercept.

Silicon Valley Bank and Signature Bank customers are being bailed out and therefore will not incur losses even though the two banks have failed.

"The Biden Administration has acted swiftly and decisively to protect the American economy and strengthen public confidence in our banking system. Their actions this weekend have calmed nerves, and had profoundly positive impacts on California — on our small businesses that can now make payroll, workers who will get their paychecks, on affordable housing projects that can continue construction, and on non-profits that can keep their doors open tomorrow. California is a pillar of the American economy, and federal leaders did the right thing, ensuring our innovation economy can continue to grow and move forward," Newsom said in a Sunday statement.

Amid fears of possible contagion, GOP Rep. Blaine Luetkemeyer has said that the U.S. government should temporarily insure all bank deposits in order to prevent massive flows of funds from smaller banks to larger institutions.

"If you don't do this, there's going to be a run on your smaller banks," Luetkemeyer said, according to Politico. "Everyone's going to take their money out and run to the JPMorgan’s and these too-big-to-fail banks, and they're going to get bigger and everybody else is going to get smaller and weaker, and it's going really be bad for our system."

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