Congressman Salud Carbajal (CA-24) issued the following statement on the failure of Silicon Valley Bank and the actions announced by the U.S. Treasury Department and Federal Reserve:
“Over the weekend, I was briefed by officials from the Treasury Department, FDIC, and Federal Reserve on the failure of Silicon Valley Bank and related turmoil, and am continuing to monitor updates on actions being taken by the Biden-Harris Administration and the Fed. Our federal government is engaged now with the goal of protecting everyday Americans who have made no financial misstep of their own, and yet have had their financial stability threatened as a result.
“I am heartened that the Biden Administration has found a way to backstop those business and personal accounts in peril at SVB without a taxpayer-funded bailout. But we must do everything in our power to ensure that protecting the depositors at SVB is not interpreted as eliminating risk for an institution’s investment strategies. Furthermore, I believe it is critical that Congress not only reassess oversight and regulatory requirements, but also consider new measures that may better account for the types of digital mob mentality – like last week’s bank run or web-driven stock crazes of recent years – which we’ve now seen have the power to collapse an institution in a fraction of the time seen in earlier eras.”This weekend’s actions make one thing clear: the United States is committed to preventing one banks’ instability from manifesting into greater financial crisis. The solution crafted by the Biden Administration ensures that the average American caught in the middle is not punished for the risky decisions of their bank’s managers, and that SVB shareholders will not see a dime of taxpayer dollars. I will continue to discuss with my colleagues and regulators the long-term implications of this industry turmoil to ensure that U.S. is taking all appropriate actions to prevent another similar episode from occurring in the future.