The failure of Silicon Valley Bank (SVB) and Signature Bank have left segments of the United States’ banking sector on shaky ground, inflicting increased scrutiny on financial institutions and rattling the nerves of the customers they serve. But Arizona bankers say the Arizona banking sector is on solid footing.

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“The banking sector in the United States – and Arizona is no exception – is safe, sound, and resilient. It is well-capitalized and highly liquid, and all Arizonans have ready access to their deposits,” the Arizona Bankers Association said in a statement.

Midsize banks have been found to have been most vulnerable, with First Republic Bank spiraling into turmoil before a group of 11 major banks infused $30 billion to give the struggling bank a lifeline and calm fears over wider economic troubles.

Following a series of moves by SVB that caused a full-scale bank run and eventually  led to its collapse, federal government regulators stepped in to close the bank. Because SVB’s clientele consisted largely of tech startups and venture capital companies, many of the corporate accounts contained more than the $250,000 typically insured by the FDIC. After the initial fallout, SVB depositors faced the prospect of losing more than $150 billion in uninsured deposits in the second largest bank collapse in U.S. history.

On March 8, however, Treasury Sec. Janet Yellen, the Federal Reserve and President Joe Biden said that they would use a “systemic risk exception” to cover the uninsured deposits of SVB and Signature.

The Arizona banking community, however, says the SVB situation was unique and not indicative of wider problems.

“The situation with Silicon Valley Bank is distinctive to that particular bank. Besides Silicon Valley Bank, which has limited back operations and no deposits housed in Arizona, there are no banks in the state that are similarly situated,” Arizona Bankers Association said. “It should be emphasized that no depositors at the banks that closed their doors last week lost access to any of their funds.”

Back in 2019, SVB announced the bank was opening a new 60,000-square-foot branch in Tempe to provide back office support services.

In a letter to the Federal Reserve, Sen. Kyrsten Sinema, I-Ariz., and several colleagues voiced their concern over whether the Fed missed clear warning signs about looming troubles for SVB.

“It is gravely concerning that retail participants, utilizing only publicly available information, were able to identify clear and compelling examples of financial mismanagement and asset over-concentration at SVB, while the Fed, which can draw even deeper from non-public supervisory information, was unable to ascertain a similar conclusion,” the letter said. “The fact that the San Francisco Fed, among other regulatory agencies, found no reason to take appropriate regulatory action or even investigate SVB further in the months, weeks, and days prior to the bank’s collapse must be addressed in a manner that restores public confidence in Fed supervision.”

Despite the tumult at SVB, the Arizona Bankers Association remains confident in the U.S. banking system’s stability. 

“Arizona Bankers Association has a high degree of confidence in the banking sector in Arizona and the United States. Every Arizonan should know that their accounts are safe and their deposits are protected. Our industry will continue to work with the administration, regulators, and Congress to further bolster that trust,” the group said.

Editor’s note: This story was originally published at Chamber Business News.