HomePoliticsDemocratic Senator Floats Social Media Censorship as Third Bank Collapses, Lawmaker Says

Democratic Senator Floats Social Media Censorship as Third Bank Collapses, Lawmaker Says

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A Republican representative stated that at least one Democrat feels that censorship should be a part of the government’s reaction to the bank failures, which have caused widespread dread in America.

“Just got off of a zoom meeting with Fed, Treasury, FDIC, House, and Senate. A Democrat Senator essentially asked whether there was a program in place to censor information on social media that could lead to a run on the banks,” Republican Rep. Thomas Massie of Kentucky posted on Twitter.

Massie stated in retrospect that the response was “we will get back to you on that” without identifying the speaker.

Just got off of a zoom meeting with Fed, Treasury, FDIC, House, and Senate.

A Democrat Senator essentially asked whether there was a program in place to censor information on social media that could lead to a run on the banks.

CNBC reported that Silicon Valley Bank failed on Friday, two days after Silvergate, a key lender in the cryptocurrency industry, announced it would voluntarily liquidate and cease operations.

Sunday marked the closing of Signature Bank, the third-largest bank failure in U.S. history. Silicon Valley Bank’s collapse was the second-largest.

Signature, which had $110.36 billion in assets and $88.59 billion in deposits as of December 2022, was acquired by the Federal Deposit Insurance Corporation, according to the New York State Department of Financial Services and Reuters. Signature has substantial links to the cryptocurrency industry.

Massie and others discussed efforts to prevent social media from addressing problems in the banking industry.

Monday saw a decline in stock prices, with the magnitude of the closures’ repercussions undetermined.

“When a step (is taken) this big, this quickly, your first thought is crisis averted. But your second thought is, how big was that crisis, how big were the risks that this step had to be taken?” said Rick Meckler, a partner at Cherry Lane Investment, according to Reuters.

Reuters reported that as of Monday mid-morning, the share prices of First Republic Bank, Western Alliance Bancorp, PacWest Bancorp, and Charles Schwab had declined by 65,1 percent, 75,9 percent, 41 percent, and 19 percent, respectively, with trading regularly interrupted due to volatility.

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