During a week when two bank failures roiled the financial world, Massachusetts’ bank CEOs found themselves racing to reassure nervous customers while also striving to take advantage of the growth opportunities the crisis created.
Numerous local bank CEOs tried to allay depositors’ concerns this weekend that the collapse of Silicon Valley Bank could spell trouble for local lenders. They also had some extra help, in the form of Massachusetts’ own Deposit Insurance Fund.
The bank, which has a major presence in Massachusetts after buying Boston Private Bank in 2021, failed after depositors – mostly technology workers and venture capital-backed companies – began withdrawing their money creating a run on the bank.
After 85 years operating separately to insure deposits in Massachusetts banks, the state’s two insurance funds have decided to merge. The Depositors Insurance Fund and the Co-operative Central Bank see their proposed merger as a way to increase efficiencies.
In a few days, Brookline Bank will no longer be a member of the state’s Deposit Insurance Fund, a private, industry-sponsored insurance fund that insures all deposits above FDIC limits at member banks. It’s only the fourth such departure since 1934.
