Watch: ex-Trump adviser dodges CNN questions whether bank deregulation caused SVB collapse

As the fallout continues from the implosion of Silicon Valley Bank, some lawmakers, like Sen. Bernie Sanders (I-VT), have pointed to a 2018 law signed by former President Donald Trump that weakened some of the post-2008 Dodd-Frank banking reforms, most notably eliminating the requirement for the Federal Reserve to conduct "stress tests" of medium-sized banks like SVB to ensure they are properly capitalized.

On Tuesday, CNN's Jake Tapper asked former Trump White House economic adviser Gary Cohn whether that might have played a role in the bank's collapse — and Cohn largely avoided answering the question, simply claiming the bill was bipartisan and mid-sized banks are struggling with too much regulation.

"So here is the CBO report," said Tapper. "It does mention that repealing the regulations would increase the likelihood a bank of this size — I think SVB had $206 billion. Is it not possible that an additional stress test might have revealed some of the bad management decisions being made by Silicon Valley, such as overinvesting in Treasury bonds, etcetera?"

"Anything is possible, but remember, this is a bipartisan piece of legislation," said Cohn. "We have to remember that. There were 67 senators that approved this piece of legislation. If my memory serves me correct, that means 17 Democrats supported it, because they understood that medium-sized banks in this country are so important to the economic stability of our country, and that we had to get them in a position where they could compete with the largest banks."

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Cohn did not clarify why stress tests — which large banks still have to undergo themselves — would make medium-sized banks non-competitive with large banks.

"If you go back to a few years ago, we were all worried about the biggest banks in this country becoming too big," said Cohn. "Remember, Too Big To Fail? So we understand that there are huge costs with this regulation, and we want as many banks as possible. Over the last decade, we have only seen banks disappear in the United States, not new ones created. So there is a big, huge cost of regulation, borne by the depositor."

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