Crisis at Silicon Valley Bank

by Maria S. Salinas

As a former director and Chairwoman of a community bank, I know the detailed attention it takes to manage the health of a bank. Never could I have imagined another banking crisis on our hands. Luckily a grave situation was averted with federal government interaction over the weekend. The failure of Silicon Valley Bank (SVB), the 16th largest bank, shook the banking community, especially the regional and community banks.

With an innovation economy thriving in Los Angeles, throughout California and the country, SVB depositors are a key part of that American ingenuity. They represent entrepreneurs, start-ups and businesses of all sizes, innovating and creating solutions for a better future. The federal government did the right thing in ensuring depositors would have access to the entirety of their funds.

Secretary of Treasury Janet L. Yellen spoke to the United States Senate Committee on Finance this week and began with “government took decisive and forceful action to strengthen public confidence in our banking." The actions protected depositors, representing entrepreneurial small business owners and founders who are innovating in Los Angeles and across the state. This action provided support to the innovation economy that is essential to this region and state.

Also, the Department of the Treasury, Federal Reserve, and FDIC’s swift actions should reinforce our confidence in our banking system. We need strong community banks, regional banks, as well as larger financial institutions. Small businesses and entrepreneurs require an array of choices to ensure their banking needs are met.

While the crisis at Silicon Valley Bank has been exhausting for both businesses and federal officials, I believe the federal government did the right thing. Read Secretary Yellen’s testimony here.