ICYMI From CBA’s Johnson: Banks Remain Strong, Well-Equipped To Continue Serving Customers & Communities

In a new Associated Press interview published this week, Consumer Bankers Association (CBA) President and CEO Lindsey Johnson expressed confidence in the strength of the banking industry following recent market uncertainty and offered insights into how bank leaders are preparing for the future. The wide-ranging conversation took place at CBA LIVE 2023, the first industry-wide gathering since the collapse of Silicon Valley Bank and Signature Bank last month. 

Commenting on how CBA members are working to ensure they remain well-positioned to continue delivering for the millions of consumers they serve in light of recent industry uncertainty, Johnson said: 

“Bankers see it as their mission to be prepared for these events when these happen. […] Most banks know you need to have a very diverse deposit base and that you need to protect yourself against interest rate risk. […] The conversations I’m having are focused around making sure you have a diverse deposit base, and more importantly, how do you plan to make sure that your risks are well managed.”

Reinforcing confidence in the strength of the industry, Johnson noted the factors that ultimately led to the collapse of Silicon Valley Bank and Signature Bank were unique and far different than headwinds faced by the vast majority of large financial institutions today:   

“I think there’s been a lot of misinformation about the industry as a whole with these two banks’ failures. These two banks had a very specific demographic of depositors that is very different from every other bank. [Their failures were fueled by] fear and uncertainty that spiraled out of control. And in Silicon Valley Bank’s case, you had a group of depositors who had a bit of a groupthink mentality, where if one pulled out, the rest did so as well.”

Since the onset of this crisis, CBA has served as a leading voice in reaffirming Americans’ trust and confidence in the well-regulated banking system. Recognizing the impact of policymakers and bank leaders who joined in this effort, Johnson stated: 

“Regulators have done a much better job at telling the public that our nation’s banking system is strong and not every bank is the same as Silicon Valley Bank. I think our banks also did a good job at differentiating themselves from the failed banks, making sure people understood the difference.”

The full Q&A is available HERE. 

Background

In her first presidential address to the industry at CBA LIVE Johnson expressed confidence in the strength, resiliency, and unity of the banking industry in the wake of recent market uncertainty To learn more, click HERE.

At CBA LIVE, Johnson also moderated a panel discussion on what’s NEXT for banks in the wake of the Silicon Valley Bank failure featuring former FDIC Chair Jelena McWilliams, former head of retail at PNC Neil Hall, and Brookings Institute Senior Fellow Aaron Klein. To learn more, click HERE.

Last month, Johnson responded to the closure of Silicon Valley Bank and federal regulators’ subsequent actions by stating, “Americans should feel confident in the strength and resiliency of our nation’s banking system. Our members are well-regulated, well-capitalized, and well-positioned to ensure consumers’ money is safe and secure.” To read the full statement, click HERE.