After Banking Crisis, Cantwell Asks Treasury Secretary Yellen: “How Do We Ensure That These Small Businesses Feel Safe?”
Companies across Washington state report disruptions as FDIC stems fallout from Silicon Valley Bank and Signature Bank collapses
WASHINGTON D.C. – Today, U.S. Senator Maria Cantwell (D-WA), a senior member of the Senate Committee on Finance, questioned U.S. Department of the Treasury Secretary Janet Yellen about the federal government’s response to the collapse of Silicon Valley Bank (SVB).
During her questioning, Sen. Cantwell highlighted the effect of SVB’s collapse on businesses based in Washington state – as well as the broader impact on people who rely on those businesses’ services.
“While the name of the bank might be Silicon Valley Bank, I guarantee you the innovation economy comes through Seattle, and probably many small businesses in my state were impacted by what transpired. And it’s why we need to make sure that the banking system really does have mechanisms that help the startup economy and innovation,” Sen. Cantwell said.
“Jesse Salk, the grandson of Jonas Salk, is a Molecular Biologist and Clinical Oncologist who started TwinStrand Biosciences in the State of Washington. He and his team at TwinStrand are developing cutting edge gene sequencing techniques to help us fight cancer. And he told my office this week that, quote, ‘It was a big deal to step outside my comfort zone and start a company to help get a new genomic technology to help treat cancer patients faster. The last thing I expected us to need to think about was if we could rely on a bank,’” Sen. Cantwell continued. “So the potential impact of Jesse's company having to pause or even cease operations due to banking failure isn't just jobs or dollars lost, which are important considerations to our economy -- it's actually lives lost, too… How do we ensure that these small businesses feel safe in putting their loans in?”
Secretary Yellen responded:
“We want to make sure that depositors -- whether they're individuals, or households, or small businesses -- feel confident that the banks that they entrust their savings to or their working balances that they use to pay their workers. We want to make sure that they feel confident that these banks are safe, and that they can do business with them. And that's an important reason why we stepped in with the FDIC and the Federal Reserve to intervene, because I do believe the banking system in the United States is sound and resilient. And we wanted to make sure that the problems at Silicon Valley Bank and Signature Bank didn't undermine confidence in the soundness of banks around the country. And we wanted to make sure that there wasn't a contagion that could affect other banks and their depositors.”
Silicon Valley Bank collapsed on March 10, followed by New-York based Signature Bank on March 12. To preserve the assets of customers and prevent a broader collapse across the banking industry, the Federal Deposit Insurance Corporation stepped in to take over both financial institutions. The effects are already being felt across the State of Washington – companies from Seattle to Spokane to Vancouver are reporting disruptions.
Video of Sen. Cantwell and Secretary Yellen’s entire exchange at the hearing can be viewed HERE, and audio can be heard HERE. A full transcript of their exchange is available HERE.
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