Jankwoski addressed concerns regarding the U.S. banking system in a March 21 webinar hosted by the GHP. He reassured attendees the U.S. is not at risk of a financial collapse such as the one in 2008-09 and said that banks are better capitalized today.
“We're not going to have a collapse. I'm sure of that because the federal government is going to do what it takes to prevent that from happening again,” Jankowski said.
Tech sector struggles
While Silicon Valley Bank’s failure caused some to panic and form serious concerns about a possible banking crisis, Jankowski said he believes SVB collapsed due to bad management decisions, poor communication and a lack of a chief risk officer.
According to Jankowski, SVB placed much of its focus on tech company clientele, and when those companies began to withdraw from their accounts, SVB was forced to sell some of its government bonds. He said the tech sector has struggled with layoffs on the rise this year.
“[SVB] ignored just a very basic principle of businesses; you need to diversify your client base,” Jankowski said.
Jankowski compared the situation to other Texas bankers who made the same mistake by focusing on large firms such as oil, real estate and gas. While such firms have the resources to contribute to banks, once the firms begin to struggle, they are forced to withdraw from their accounts to cover their expenses.
Preventing a collapse
There are systems in place to avoid another incident like the one at SVB, Jankowski said. In the event a bank was at risk of collapsing, he said the Federal Reserve Board would make additional available funding to help eligible depository institutions meet the needs of other deposits.
Based on data presented during the webinar from the Board of Governors of the Federal Reserve System, Jankowski said loan restrictions will be more strictly implemented for consumers and commercial and industrial firms.
He said although there may be indications the economy could be leading toward a recession, he does not believe it will be a long-term issue for the U.S. or the Greater Houston area.
“We'll continue to go through downturns, but in the end, we always recover. We always come out the other side healthier than we were going in, and somehow in spite of everything, this region finds a way to grow,” Jankowski said. “And whatever happens with the U.S. economy, whatever happens with the Houston economy over the next six to 12 months, we will eventually find a way to grow again.”
