After everything that’s happened over the last decade, it’s hard to believe that Europeans would trust any commitments made by US policymakers. And yet according to the Financial Times:
Europe’s financial regulators are furious at the handling of the Silicon Valley Bank collapse, privately accusing US authorities of tearing up a rule book for failed banks that they had helped to write.
While the disapproval has yet to be conveyed in a formal setting, some of the region’s top policymakers are seething over the decision to cover all depositors at SVB, fearing it will undermine a globally agreed regime.
One senior eurozone official described their shock at the “total and utter incompetence” of US authorities, particularly after a decade and a half of “long and boring meetings” with Americans advocating an end to bailouts.
Why would anyone trust America? We also wrote the rule book on international trade (Washington Consensus), and then started violating trade law in every way possible (under both Trump and Biden.)
Our policy is completely, 100% unprincipled. We state broad principles, and then in the moment we do whatever is politically expedient.
There’s a term for this sort of country:
PS. Yes, our banks (and regulators) were blindsided by rising interest rates that devastated the value of their long-term bonds. But surely no one could ever have imagined the possibility that 10-year Treasury bond yields would skyrocket up to . . . checks notes . . . 3.5%!!