China Blames US Bank Woes on Bad Regulation Political Bickering
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Bloomberg News
Customers in line outside Silicon Valley Bank headquarters in Santa Clara, California, US, on Monday, March 13, 2023. The collapse of Silicon Valley Bank has prompted a global reckoning at venture capital and private equity firms, which found themselves suddenly exposed all together to the tech industry's money machine. , Bloomberg
(Bloomberg) -- Chinese state media blamed political infighting and poor financial regulation in the US for recent bank failures, escalating the two nations war of words amid simmering tensions.
While the management of the banks in question should bear the most direct responsibility for the mismanagement of the companies, the absence or mistakes of the US on financial supervision and macro policies is the most important thing to reflect on from the incident, the official Xinhua News Agency said in an analysis piece published Wednesday.
The flip-flopping of financial supervision due to domestic political disputes was totally exposed in this incident, it added, referring to Trump-era rules that freed mid-sized firms from some strict regulations.
China frequently holds up its system of governance as superior to the US, such as early in the pandemic when the virus was causing rising death tolls in America, compared to China where closed borders and other restrictions kept the population largely unaffected.
That tendency for China to praise its own way of doing things is amplified when tensions between the worlds two largest economies spike. The nations have sparred recently over allegations a spy balloon flew over the US, and over Washingtons efforts to block China from getting advanced chip technology, partly to slow Beijings military modernization.
Read: US-China Downward Spiral Raises Fresh Fears of Eventual Conflict
The Xinhua article also said that countries around the world are footing the bill for the collapse of the US banks because the crisis has exacerbating pressure on central banks to safeguard financial stability.
Officials at the Peoples Bank of China met Wednesday to address concerns around financial stability. The central bank vowed to manage the pace of credit extension well, ensure credit growth stays reasonable, and do its best to stabilize growth, employment and prices.
Also: China Central Bank Heeds Xi Call to Fight US Containment
With global financial markets in turmoil, the PBOC vowed to strengthen the financial system to ensure stability and improve contingency plans.
CGTN, a foreign-language state media outlet, also highlighted the problems at Silicon Valley Bank and Signature Bank. It reported that it ran an online poll that found that more than 90% of respondents said they believed the US governments oversight of the financial system has practically no function.
A similar number said that the continued collapse of banks will increase investors distrusts of US banks and financial institutions.
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