Massachusetts is still struggling with the fallout from Silicon Valley’s bankruptcy
The collapse of a Silicon Valley bank continues to reverberate through Massachusetts as lawmakers demand accountability.
A few days later, the Silicon Valley bank collapse hit Massachusetts again, shaking everything from tech startups. affordable housing sector.
Although the federal government assures that all deposits at SVB are guaranteed, the bank’s reputation as a destination for startups and nonprofits puts Massachusetts in a unique position.
“We know that Massachusetts could be particularly affected by this situation because of its strong technology, innovation and life sciences sectors, and because SVB has a large customer base here, including nonprofit organizations. profits, individuals and others,” Economic Development Secretary Yvonne Hao said in a statement. Sunday.
The bank, which has offices in Boston, Newton, Wellesley, Cambridge and Beverly, has become known as a destination for venture capitalists looking for financial partners open to unconventional business propositions, the Associated Press reported. reported.
“They understood startups, they understood venture capital,” said Leah Ellis, CEO and founder of Somerville-based Sublime Systems. “They are embedded in the structure of the startup community I’m involved in, so doing business with SVB was a no-brainer.”
Kendall Berlin O’Connell, president and CEO of the Massachusetts Biotechnology Council, said the SVB’s collapse had a “deep impact” on many MassBio members, the State House News Service reported.
He told members on Sunday that he would be in regular contact with government and industry officials “to determine how the public and private sectors can work together to provide short-term solutions to the businesses most affected, if necessary.” “, reported SHNS.
SVB’s fallout also reached affordable housing developers who for years relied on loans and sponsorships from Boston Private Bank and Trust, which SVB acquired in 2021. The Boston Globe reported.
“Boston Private has been a cornerstone of affordable housing in our area,” Kimberly Lyle, CEO of the Dorchester Bay Economic Development Coalition, told the newspaper. “It’s a scary moment for us.”
And the members of the delegation of the Massachusetts Congress condemn it and demand an answer.
On Tuesday, former SVB President and CEO Gregory W. In a letter to Becker, Sen. Elizabeth Warren cited the 2018 rollback of banking regulations enacted after the 2008 financial crisis — easing of regulations that Becker himself supported.
“You have no one to blame for your bank’s failure but yourself and your colleagues on the board,” Warren wrote. “You supported lax regulations, got what you wanted, and used that opportunity to abdicate your core responsibilities to your customers and the public — helping prevent an economic disaster.”
U.S. Rep. Ayanna Pressley, a member of the House Financial Services Committee, called for a committee hearing to “examine the bank collapse and how the Republican banking regulation bill of 2018 contributed to SVB’s risky behavior and threatened the financial stability of too many people.” people”.
Hao, the state’s secretary of economic development, told Politico’s Massachusetts Playbook that he thinks the bank’s collapse “will have a lot of aftershocks and reverberations in Massachusetts,” adding that “it could be a few years, it will be much longer.” difficult”. starting or growing a business.
“We’re not that advanced yet,” Hao told Playbook.
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