Massachusetts still grappling with effects from Silicon Valley Bank failure

Xavier Roger



The Silicon Valley Bank collapse continues to reverberate throughout Massachusetts as lawmakers demand accountability.

David L. Ryan/Globe Staff
A long line of customers waited outside a Silicon Valley Bank branch in Wellesley on Monday morning.

Several days in, the Silicon Valley Bank collapse continues to reverberate throughout Massachusetts, rattling everything from technology startups to the affordable housing sector

While the federal government has assured that it will guarantee all deposits at SVB, the bank’s reputation as a destination for startups and nonprofits puts Massachusetts in a distinct position.

“We know Massachusetts may be uniquely impacted by this situation due to our strong technology, innovation, and life sciences sectors and because SVB had a broad client base here, including nonprofits, individuals and others,” Economic Development Secretary Yvonne Hao said in a statement Sunday. 

The bank — which has locations in Boston, Newton, Wellesley, Cambridge, and Beverly — made a name for itself as the “go-to” spot for venture capitalists in search of financial partners open to unconventional business proposals, The Associated Press reported. 

“They understood startups, they understood venture capital,” Leah Ellis, CEO and co-founder of Somerville-based Sublime Systems, told the AP. “They were woven into the fabric of the startup community that I’m part of, so banking with SVB was a no brainer.”

Kendalle Burlin O’Connell, the president and CEO of the Massachusetts Biotechnology Council, said SVB’s collapse has “severely impacted” many of MassBio’s members, according to State House News Service. 

She told members Sunday that she was in constant communication with government and industry officials “to determine how public and private sectors can work together to provide short-term solutions to companies that are most affected, if necessary,” SHNS reported. 

The SVB fallout has also reached affordable housing developers, who for years have 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 backbone of affordable housing development in our region,” Dorchester Bay Economic Development Coalition CEO Kimberly Lyle told the newspaper. “It’s a scary moment for us.”

Meanwhile, members of Massachusetts’ congressional delegation are assigning blame and demanding accountability. 

In a letter to former SVB President and CEO Gregory W. Becker Tuesday, Sen. Elizabeth Warren cited the 2018 rollback of banking regulations passed in the aftermath of the 2008 financial crisis — a loosening of regulations that Becker himself lobbied for. 

“You have nobody to blame for the failure at your bank but yourself and your fellow executives,” Warren wrote. “You lobbied for weaker rules, got what you wanted, and used this opportunity to abdicate your basic responsibilities to your clients and the public – facilitating a near-economic disaster.” 

U.S. Rep. Ayanna Pressley, a member of the House Financial Services Committee, called for a committee hearing “to investigate the bank’s collapse and how Republicans’ 2018 bank deregulation bill contributed to SVB’s risky behavior and jeopardized financial stability for far too many.”

Hao, the state’s economic development secretary, told Politico’s Massachusetts Playbook she believes the bank’s collapse “is going to have a lot of aftershocks and reverberations here in Massachusetts,” adding that there may be “a couple of years where it’s going to be much harder to start or grow companies.”

“We’re not out of the woods yet,” Hao told Playbook.


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