Potential impacts after the collapse of two major banks
(ABC 6 News) – The collapse of Silicon Valley Bank and Signature Bank, represent the second and third-largest bank failures in U.S. history.
Now, people across the country are asking, how safe is my money and what happens next?
Following the collapse of SVB and Signature Bank, the government swiftly took action to take control of the potential crisis.
The situation leaves many others questioning how safe their money and their bank really is.
“From a federal standpoint, the government is going to back its banks but, it certainly makes me cautiously you know look at the future and what that’s going to look like,” Rochester resident Andy Hayden said.
With these major collapses, it may look a bit like the financial crisis of 2008, leading many to worry whether these bank failures along with sky-high inflation could lead to another major recession.
Luckily, experts don’t think that’s the case.
Places like First Alliance Credit Union says this collapse won’t have an impact on them.
“This was a more isolated incident caused by some very specific situations, a perfect storm so to speak, and so it’s not thought that this is going to be anything like that,” President and CEO of First Alliance Credit Union Michael Rosek said.
The long-term impacts of these failures are still unclear, but as the federal government works to regain control, they’re trying to make one thing clear to Americans, your money is safe in the bank.
“The government with all of these actions this week is basically telling you they have your back, that your money will be there and accessible if you have it in the bank,” ABC News business reporter Alexis Christoforous said.
In the meantime, President Biden is also trying to make another distinction clear, the federal government’s action in this case is not a taxpayer bailout.
The money used to pay back depositors comes from an FDIC fund that banks pay into themselves, meaning no taxpayer money is being used as officials work to resolve these issues.