Mayor of San Jose, Capital of Silicon Valley, Says U.S. Treasury’s Incompetent Handling of SVB Crisis Risks Harm to Millions of Americans
The Federal Government must restore confidence before Monday morning or put thousands of workers and the nation’s innovation economy at grave risk.
FOR IMMEDIATE RELEASE
March 12, 2023
Media Contact:
Tasha Dean, Chief Communications Officer, Office of Mayor Matt Mahan, tasha.dean@sanjoseca.gov
SAN JOSÉ, CA - San Jose Mayor Matt Mahan blasted Treasury Secretary Janet Yellen’s approach outlined on Face the Nation this morning, calling them insufficient half-measures that put the nation’s innovation economy and hundreds of thousands of U.S. workers at risk.
On the program, Secretary Yellen would not commit to guaranteeing the deposits of customers of former Silicon Valley Bank (SVB) or confirm when they might have access to these funds, but only said that “this is something we're working to try to resolve.”
“The Secretary’s approach is weak, half-hearted and wrong,” said San Jose Mayor Matt Mahan. “We don’t have time to wait for a white knight to swoop in and acquire the bank. Half of Silicon Valley’s startups are at risk of missing payroll in the days ahead if the FDIC doesn’t guarantee and give immediate access to their deposits.”
Mayor Mahan continued, “the Federal Government must restore confidence today and ensure account holders have full access to their deposits tomorrow morning. Otherwise, tens of thousands of workers are at risk across Silicon Valley, to say nothing of the risk of global financial chaos as depositors flee small and medium-sized banks around the world.”
For nearly 40 years, SVB has been a linchpin of the tech startup ecosystem, providing basic banking services to thousands of startups that have transformed the world and made the U.S. economy more dynamic and globally competitive. A bank run triggered last week and the ensuing liquidity crisis has frozen billions in depositors’ assets, effectively suspending core operations of thousands of small companies.
Mayor Mahan concluded by affirming, “This is not a bailout for billionaires. SVB executives and shareholders should not be protected from their mistakes. But the thousands of startups that drive America’s economic competitiveness should not be further punished for the failures of federal regulators and bank executives. This is a classic liquidity crisis. The government can stop this madness today and reimburse itself over time as it sells off the bank’s assets.”
Mahan also commented on reports of top SVB executives selling shares in the bank immediately before its collapse, stating that “these reports are incredibly disturbing and must be investigated and, if wrongdoing is found, prosecuted. Recent stock sales by executives should be clawed back and used to make depositors whole.”
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