COLORADO SPRINGS — With the collapse of two major banks, Silicon Valley Bank and Signature Bank, News5 looked into if there are any reasons for concern or worry here at home in Southern Colorado. We're told the short answer, is no.
Joe Craig is the director of the UCCS economic forum. He said the banking system in America remains very safe and there won’t be any short-term impacts. But he’s also urging people to not go to to the bank and take out all of their money or savings, because it could have a wide-ranging negative impact on the financial system.
“Could that destroy the banking industry? Absolutely. So let's please not do that,” said Craig.
He said if you have $250,000 dollars or less in your bank, your money is federally insured by the federal deposit insurance corporation — or FDIC.
“Short term effects, not a lot to worry about. Really, there's almost nothing to worry about. Your deposits are covered. The administration has already jumped in and said we won't be allowing this to ripple any further,” said Craig.
But he said if you have more than $250,000 dollars in your bank, and the bank fails, you could be as risk of losing money in excess of that. He also mentioned the two banks involved took risky behaviors.
“That being said, it's very unlikely that mainstream banks are going to fail or that there's going to be a kind of cascading effect as a result of this,” said Craig, “especially with the administration already jumping on board and not allowing it to go any further and saying that they will honor all the deposits that were made in that bank.”
News5 also spoke to Brett Wyss, the president and CEO of Integrity Bank & trust. He said while the collapses of these banks have brought up concerns from their customers, their bank does not carry exposure in similar areas. He said the banks that did collapse did online banking for the most part.
In a statement he said, “Our finances are strong, and we carry sufficient capital and liquidity to meet all customer demands. We deal with local businesses and local consumers that we know and have actual relationships with,” said Wyss.
Drew Braden is a UCCS student who also invests his money. He weighed in on the topic and said he’s not worried about the downfall of the two banks either.
“You shouldn't really have to worry too much about losing your money that you have it in a savings account,” said Braden. “I wouldn't be too concerned. We have a lot of trader and consumer protections in place.”
Braden said he began investing his money last year. He checked on his personal investments this week and said he lost a chunk of money. He believes the collapse impacted his investments, but still isn’t a major concern.
“If you're an investor, you know long term is kind of the goal, and that if you're going to invest, you're going to see some setbacks in them. And so it's no reason to be discouraged. We're in this for the long haul,” said Braden.
Craig also said as a result of the bank fallouts, he expects the feds to pause all rate increases or not raise them significantly.
The collapse of two major U.S. banks over the past week continues to have a ripple effect on smaller banks. Today, 12 regional banks had trading halted after their shares plunged. This includes PacWest bank, which has locations in Colorado. Last week, Silicon Valley Bank collapsed after a run on their deposits. Federal regulators said over the weekend that customers would have access to their funds today. Then over the weekend, regulators in New York shut down Signature Bank.
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