By now most people know that Silicon Valley Bank is going belly up. It looks like your classic bank run. Did you know that Silvergate shut down the day before? They specialized in servicing the crypto market and are part of the ongoing FTX fallout.
Are these isolated incidents or is it going to get a whole lot worse? All I know for sure is that you don’t want to go to Jim Cramer for advice. A month ago he was recommending people buy Silicon Valley Bank.
I am not a financial advisor. It had to be said. However, to me it just makes sense to avoid any bank heavily involved with crypto. That’s a given. All the major FTX people have been arrested but that won’t do your bank deposits much good.
Then you have to ask yourself how many other banks are exposed the way Silicon Valley was. From what I could gather they had a lot of deposited from startup investor money. Rising interests rates put them in a bind where they lost billions.
So how bad is this going to be? Bank regulations were proposed after the 2008 crash but those were mostly gutted. Powerful interests didn’t want that kind of oversight. If this goes sideways it could get interesting again.
You might want to have funds handy in case your bank suddenly closes its doors. Deposits are generally insured to $250,000 but it could take time for your insurance payout. I don’t deal much with big banks. Most of my financial day to day business is through a local credit union.
About the only thing I plan on doing is to buy a couple more bags of rice. That’s the level my finances generally run at. Then again, rice is real and you can eat it -which is more than you can say about bank deposits in a failed bank.