House Republicans Say SVB Rescue Shouldn’t Benefit China

According to House Republicans in a letter to President Joe Biden, the Chinese Communist Party ( CCP) shouldn’t gain from the U.S. government’s rescue of Silicon Valley Bank( SVB ).

In order to see if the federal government’s reform of the lender could provide taxpayer funding to CCP-supported businesses, Democratic lawmakers asked for an investigation into SVB, the California-based financial institution that failed earlier this month.

According to reports in the letter, which Fox News first obtained( pdf ), SPD Silicon Valley Bank, a 50 / 50 joint venture between the state-owned Shanghai Pudong Development Bank and SVB Financial, was the company’s subsidiary. The GOP lawmakers are attempting to determine which Taiwanese companies were associated with SVB and how much of their assets and money were deposited in the lender.

The letter, written by Rep. Rich McCormick( R-Ga. ), states that” SSVB and SVB have played an indispensable role in financing China’s innovation economy, serving over 2, 000 clients and advising CCP government regulators, is extremely concerning and raises serious questions.” According to reports,” SVB helps Chinese companies get American investment or go public abroad, getting around limitations on raising money and listing outside of China.”

The letter ends by stating that the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corp.( FDIC )” never manage to be asleep at the wheel ,” while the CCP supports its businesses” at the expense of British citizens” with the assistance of U.S. venture capitalists.

The Democratic co-signers gave the White House a deadline of April 3 to deliver responses, supporting documentation, and other details.

Sources told Bloomberg last week that the Biden administration was looking into whether SVB’s loss put more of a strain on Chinese technology companies than the Beijing government.

Did the SVB loan edge China?

Most Republicans have expressed concern that those with ties to the Chinese government would be included in the billions spent to bail out international unemployed or uncovered payments following the problems of the SVB and Signature Bank.

Sen. Marco Rubio( R-Fla. ) wrote in a letter to Treasury Secretary Janet Yellen,” I ask the department to ensure that foreign adversarial regimes and businesses under their jurisdiction are unable to exploit this moment for their own material benefit.”

Sen. James Lankford( R-Okla. ) questioned Yellen about whether Chinese and foreign depositors from SVB would be compensated fully after the U.S. government’s intervention when he appeared before the Senate Finance Committee on March 16.

She said,” I suppose that may include international lenders.” ” I don’t think there’s any legal justification for discriminating against the insured.”

In the days that followed SVB’s problems, it became clear that the company had numerous Taiwanese accounts. A statement from SPD Silicon Valley Bank stating that its services were” sound” was issued.

The industry claimed that the bank has an active balance sheet and a standardized corporate management structure.

SVB established an office in Beijing in 1999 to conduct its second business with China, offering customer support and consulting services to venture capitalists and technology companies.

At a sharp discount of$ 16.5 billion, First Citizens, meanwhile, purchased about$ 72 billion of SVB’s assets. The$ 90 billion securities and other assets of the struggling bank that will remain” in receivership for disposition by the FDIC” will still be owed to the U.S. government.

According to the FDIC, SVB’s Deposit Insurance Fund would likely lose about$ 20 billion as a result of its decline. After the bankruptcy is over, the last total may be calculated.