[Rajoo]

As usual NYT has the story in simple words. This article is actually about Signature Bank (NY) which also got shut down two days after SVB. Zions bank is now being pummeled but they are a lot bigger than SVB and Signature.

Mr. Trump was more receptive. Barely a week after taking office, he called Dodd-Frank “a disaster” and told reporters that “we’re going to be doing a big number on” the law.

Which of course he and his minions did.

In the spring of 2018, President Donald J. Trump signed a law that watered down the landmark regulatory reform act that his predecessor had enacted following the global financial crisis. The changes won a surprising supporter: the liberal former congressman Barney Frank.

Mr. Frank was a primary architect of the Wall Street Reform and Consumer Protection Act, better known as Dodd-Frank. But since his retirement in 2013, he had repeatedly voiced support for softening one of the law’s key planks: that any bank with more than $50 billion in assets should face especially intensive federal supervision.

The ensuing tweak — lifting the threshold to $250 billion — had big consequences. Among other things, scores of very large banks would escape, at least initially, the Federal Reserve’s annual “stress tests” and enjoy easier financial-safety requirements.

The legislation followed years of pressure from bank executives and lobbyists, including Greg Becker, who until Friday ran Silicon Valley Bank.

“Without such changes, S.V.B. likely will need to divert significant resources from providing financing to job-creating companies in the innovation economy,” Mr. Becker warned lawmakers in 2015.

One beneficiary of the change was Signature Bank, a New York lender whose board of directors included Mr. Frank.

Now Signature is dead — a victim of a fast-moving crisis that has revealed the extent to which the banking industry and other opponents of government oversight have chipped away at the robust regulatory protections that were erected after the 2008 financial meltdown.

On Sunday, regulators shut down Signature, fearing that sudden mass withdrawals of deposits had left it on dangerous footing. Its failure came barely 48 hours after the collapse of Silicon Valley Bank, whose executives had joined Mr. Frank in successfully pushing to lift the $50 billion threshold.

And finally this:

Mr. Frank, who received more than $2.4 million in cash and stock from Signature during his seven-plus years on the board, left the job on Sunday as regulators dissolved the board. He said on Monday that the bank was the victim of overzealous regulators. “We were the ones who they shot to encourage others to stay away from crypto,” he said

I am not claiming that the $250 Billion threshold alone caused these banks to shut their doors, but they do have a correlation.

https://www.nytimes.com/2023/03/13/b...egulation.html