The US-India Partnership Forum welcomes the swift action to protect Silicon Valley bank depositors

Washington:

The US India Strategic and Partnership Forum (USISPF) has welcomed the steps taken to fully preserve insured and uninsured deposits at the now-collapsed Silicon Valley bank, saying a swift decision is crucial to maintain US leadership in global startups. innovation ecosystem.

USISPF chief Mukesh Aghi said on Sunday that Silicon Valley Bank (SVB) had been the go-to bank for American and foreign tech startups and members of the venture capital industry for years, and its sudden shutdown left few of its clients around the world. crisis.

The immediate challenge, he said, was to prevent contagion beyond the current confines and maintain U.S. leadership in the global startup ecosystem by ensuring that the problem is addressed quickly and systematically.

“The authorities did this knowing that failure to protect the value of deposits would destroy many of these start-up firms, costing hundreds of thousands of jobs and affecting the lives of millions of people around the world. In addition, the startup ecosystem in the United States is closely integrated with the ecosystem globally,” said Agee in a statement.

“The financial crisis of many start-ups is repeated all over the world, especially in innovative countries like Ireland, Israel and India. Important measures were to prevent the loss of trust and confidence in Silicon Valley, which, if lost, may never be regained and would further weaken the position of the United States as a global startup leader,” he said.

California-based Silicon Valley Bank, the 16th largest bank in the United States, was closed on Friday by the California Department of Financial Protection and Innovation, which later appointed the Federal Deposit Insurance Corporation (FDIC) as its receiver.

One of the most important and successful exports of the United States has been the idea of ​​the American Dream, a dream that many founders and co-founders of startups have emulated, according to Agi’s USISPF study, which is more than 70 percent of startups. with immigrant founders and by 2022, more than 50 CEOs of public companies will be of Indian origin.

“In the tech space, both the United States and India have seen great collaboration and convergence. The synergy is best represented by India’s technology talent and the robust technology sector of the United States,” he said.

The technology industry has provided the US with global competitiveness for decades, and Silicon Valley continues to represent this center of innovation. During a visit to the valley in 2015, Prime Minister Narendra Modi said, “California is one of the last places in the world to see the sunset, but this is where new ideas see the first light of day.” There are millions of jobs, liquidity and dreams in the startup-innovation economy, all of which are at significant risk if liquidity is disrupted, he said. USISPF’s immediate focus is to help ensure security for startups and venture capitalists (VC) deposits in a timely and efficient manner, Aghi noted.

“The outflow of SVB funds may turn into not only a financial crisis, but also a technological crisis. So we thank the Federal Reserve System, the FDIC, and the US Treasury Department for acting quickly and reassuring startups during the crisis. Going forward, I will encourage the White House and the Treasury Department, working in partnership with Congress, to strengthen the regional banking system,” Agee said.

“The US startup ecosystem has tremendous influence around the world, and urgent action is needed to protect it during these difficult times,” added the USISPF president.

(Except for the headline, this story was not edited by NDTV staff and was published on a syndicated channel.)