Fact check: 15 bank failures happened during Trump administration, though none as big as SVB
The claim: There were no bank failures during Trump’s presidency
A March 13 Facebook post (direct link, archive link) attempts to connect bank failures to recent presidencies.
“You know what didn’t happen when Trump was President?” the post reads. “Bank failures.”
It was shared almost 500 times in two days. Former President Donald Trump’s son, Donald Trump, Jr., tweeted a similar claim that was shared more than 10,000 times.
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Our rating: False
There were 15 bank failures during Trump’s presidency, not zero. But experts also told Paste BN such tallies are not a meaningful tool for comparing administrations because bank failures are often the result of decisions made over long periods of time.
Bank failures happen after years of decisions, experts say
This claim comes in the wake of the failure of Silicon Valley Bank, which collapsed on March 10 after the bank's shares lost over $160 billion in value over a 24-hour period and depositors withdrew their money in panic, as Paste BN reported.
According to data from the Federal Deposit Insurance Corporation, there were 15 bank failures from the time Trump took office in January 2017 to when he left office in January 2021.
The first came only one week into Trump’s term, when regulators closed Chicago’s Seaway Bank and Trust Company on Jan. 27, 2017.
Fact check: Posts wrongly tie Silicon Valley Bank and Lehman Brothers end to Joseph Gentile
But it’s “ludicrous” to try to use such data as a tool to compare different presidential administrations, said Robert Pagliarini, president and chief financial advisor of Pacifica Wealth Advisors. That's because presidents can "inherit the mistakes and problems" of the past that can lead to financial downfall in the present, he said.
“That is, bank failures are the results of mistakes that accumulate over time,” said Roberto Robatto, a finance professor at the University of Wisconsin-Madison.
While the Silicon Valley Bank failure is the largest since 2008, George Washington University finance and economics professor Robert Van Order said its impact is unlikely to be as large. He added that bank failure data should be kept in perspective.
"We have 4,000 banks in the U.S.," he said. "If you think about four or eight going bankrupt, that's hardly any."
The Facebook user who made the claim said he was referring only to "large banks," but the post made no such distinction.
Our fact-check sources:
- Robert Pagliarini, March 16, Email exchange with Paste BN
- Robert Van Order, March 16, Phone interview with Paste BN
- Roberto Robatto, March 15, Email exchange with Paste BN
- Federal Deposit Insurance Corporation, March 14, Bank Failures in Brief – Summary 2001 through 2023
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