SEATTLE — The collapse of Silicon Valley Bank is being felt across the country as well as here in Washington.
In a rare early morning address, President Biden assured people with deposits at the bank that their money would be returned to them, including any deposit of any size.
SVB has offices in a high-rise building on Fifth Avenue in Downtown Seattle across the street from the federal courthouse and the main branch of the Seattle Public Library.
It’s not fully clear what, if anything, happens to those offices after the bank’s collapse last Friday.
Dave Parker is on the board of the Washington Technology Industry Association with a focus on startups. He spoke to KIRO 7 on Monday morning and said that the weekend brought a radical shift for companies with funds tied up at SVB.
On Friday, he said companies were worried about making payroll this week, but Biden’s assurance has drastically changed things.
“(A) big sigh of relief (but) there are still concerns around credit cards backed by SVB and lines of credit,” said Parker.
Parker said that many companies, including those in Washington, had payroll due on Wednesday. He also said SVB is known to many companies in the state that have used SVB for commercial banking.
Parker said it isn’t just the tech sector that relied on SVB. Washington wineries also had ties to the bank.
CBS News cameras caught images of customers lined up early Monday outside SVB’s Santa Clara, Calif., branch to withdraw money. Parker said local companies spent the weekend opening accounts at new banks — a process that normally takes a week. In this case, banks waived that time constraint.
“SVB here in the Northwest is an institution. They’re part of the ecosystem, they’re part of the community,” said Parker.
He said the first sign of trouble last week accelerated quickly when people on Friday or late Thursday started withdrawing funds from the failing institution.
“Human nature doesn’t change. A run on a bank, is a run on a bank, whether it’s a wonderful life example in black and white or whether it’s in the tech age. The fact of the matter is when people get anxious about it — Twitter just triggered it faster. To see it all happen in 48 hours was still kind of crazy,” said Parker.
Parker said companies in Washington are also trying to open new lines of credit now that SVB’s credit situation is uncertain. He added that Washington companies are also watching to see if SVB is sold to another bank.
Biden has promised to fire senior management at SVB after the government takeover of the bank.
©2023 Cox Media Group