Focus On Finance: Transition From Liquidity Crisis To Optimization

The recent banking crisis, spurred by the collapse of Silicon Valley Bank (SVB) and followed by Signature Bank and possibly other regional banks, has caused turmoil and increased uncertainty in an already volatile environment marked by rising interest rates, inflation, and geopolitical unrest. Although the government has established a program to guarantee customer deposits, the crisis has heightened the awareness of companies of the importance of their banking, lending, and liquidity situations.

Companies can take action to mitigate their risk while maximizing flexibility and optionality. In doing so, it is critical to evaluate not only their own exposure but also that of their customers and suppliers. Following any immediate triage activities, there are opportunities to strengthen the company and build resilience for the longer term.