Many of us still get a chill running down our spines when we hear about bank failures and bailouts. After all, it was less than 15 years ago when we went through one of the worst economic disasters in history, and institutions such as Bear Stearns, Lehman Brothers Inc., American International Group Inc. and others became famous for the wrong reasons. The Great Recession took years to recover from, and some of its effects can still be felt to this day.
So in March, when several banks collapsed in what were the largest bank failures since that financial crisis in 2007 and 2008, you’ll forgive some of us from getting a bad feeling of deja vu.
This time, it’s the tech sector driving things. Silicon Valley Bank, the largest institution to go bust in March, served a large number of tech startups, while other failed banks, such as Silvergate Bank and Signature Bank, were known as go-to institutions for the cryptocurrency industry.
The government moved quickly to intervene, with President Joe Biden reassuring the public that, “Our banking system is safe,” and promising that customers would be made whole, according to CNN. Biden also called for new banking rules and tighter regulations.
In this episode of the Legal Rebels Podcast, Nathan E. Seiler, a partner at the Am Law 100 law firm Ballard Spahr, talks to the ABA Journal’s Victor Li about the Silicon Valley Bank failure and what it means for the larger financial sector.
Seiler, who is chair of the firm’s Business and Transactions Department, also talks about how this batch of bank failures is different than what happened in 2007 and 2008 and what, if any, reforms and changes that we might see from the federal government.