In late March, former President Donald Trump took to Twitter to blame the collapse of Silicon Valley Bank on the watering down of financial regulations. Trump’s accusation came as a surprise, as it had been nearly two years since the bank had failed.

At the time of the collapse, the bank had been one of the largest lenders to the tech industry, helping to finance some of the biggest names in Silicon Valley. The bank’s failure sparked a wave of panic among tech investors, who feared that the collapse would lead to a broader downturn in the tech industry.

According to Trump, the bank’s collapse was the result of financial regulations being weakened during the Obama era. “The collapse of Silicon Valley Bank is a tragic reminder of how we must never let politics weaken our financial system. And Obama’s weak regulations did just that,” Trump tweeted.

Trump’s accusation is not entirely unfounded. In the years leading up to the bank’s collapse, there was a concerted effort to roll back financial regulations that had been put in place after the financial crisis of 2008.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law in 2010, was the most significant piece of financial reform legislation since the Great Depression. The law imposed new regulations on banks and other financial institutions, aimed at preventing the type of risky behavior that led to the 2008 financial crisis.

However, in the years following the law’s passage, there was a push to weaken many of its provisions. Critics argued that the regulations were overly burdensome and were holding back economic growth.

In 2018, a bipartisan bill was passed that rolled back many of the regulations imposed by Dodd-Frank. The bill was signed into law by President Trump, who hailed it as a victory for the American economy.

However, while the rollback of financial regulations may have contributed to the collapse of Silicon Valley Bank, it was not the only factor. The bank had been heavily exposed to the volatile tech industry, and its collapse was ultimately the result of a combination of factors.

One of the main issues facing the bank was its level of exposure to risky loans. In the years leading up to the collapse, the bank had aggressively pursued loans to tech startups, many of which were untested and unproven. When the tech industry began to cool off, the bank was left holding a large number of defaulted loans.

Another factor in the bank’s collapse was its use of leverage. Like many banks, Silicon Valley Bank had borrowed heavily to finance its operations. When the bank began to suffer losses on its loans, its leverage magnified those losses, leading to a rapid decline in its financial position.

Finally, the bank’s corporate culture may have played a role in its collapse. According to some reports, the bank was known for its aggressive lending practices and its willingness to take on risky loans. This corporate culture may have contributed to the bank’s high level of exposure to the tech industry and its eventual collapse.

In the end, while the rollback of financial regulations may have played a role in the collapse of Silicon Valley Bank, it was ultimately a combination of factors that led to the bank’s failure. Trump’s accusation that weak regulations were solely to blame for the collapse is overly simplistic and ignores the complex reality of the situation.

However, Trump’s tweet does highlight a broader debate over the role of financial regulations in the economy. Many Republicans argue that regulations are overly burdensome and are holding back growth, while many Democrats argue that strong regulations are necessary to prevent another financial crisis.

The truth likely lies somewhere in between. While some regulations may be overly burdensome and may hinder economic growth, there is no denying that strong regulations are necessary to prevent financial crises and protect consumers.

As the debate over financial regulations continues, it is important to remember the lessons of the past. The collapse of Silicon Valley Bank serves as a reminder of the dangers of aggressive lending practices and the need for responsible corporate governance. Only by working together to promote responsible behavior in the financial industry can we hope to avoid another financial crisis in the future.