What the fall of Silicon Valley Bank and Signature Bank means for you

What the fall of Silicon Valley Bank and Signature Bank means for you

DALLAS (CBSNewsTexas.com) – Many Americans are worried about the potential impact to their finances after two major banks have closed. 

With aggressive interest rate hikes and inflation, people were already worried about the economy. 

"It's taken the country by storm. Hearing that a bank failed, some people don't know how is this really happening," said Stewart Fields, an adviser and financial professional at OpenAir.

After seeing the second largest bank failure in U.S. history, with the closure of Silicon Valley Bank and New York-based Signature Bank, more fear is looming.

"What's different now from 2007, is that largely banks are much healthier, much more capitalized, they're flushed with liquidity right now," said Victor Valcarcel, an associate economics professor at the University of Texas at Dallas. 

Valcarcel said thankfully, things will be in better shape since federal regulators jumped in to help. 

Now, insured depositors are expected to receive at least $250,000 from the Federal Deposit Insurance Cooperation. Others will have to file a claim that could be reimbursed.

"These deposits, since they're insured, and it does not come from the government or taxpayers… it serves to put a hand on the dipping domino, so it doesn't create a contagion effect on the rest of the banks," Valcarcel said.

This could have a domino effect on tech companies and investors who are waiting to see if they'll receive all their money back. Meanwhile, Fields says this collapse serves as a reminder for everyone. 

"There is the advantage of diversifying some of your savings and checking accounts. You don't have to put them all at one bank," Fields said. 

Fields suggests, "Ask good questions, do your research, or find someone that you really trust who knows their research and their information. Making sure that you have up to $250,000 per account, get creative in that and maybe use multiple banks."

There's still several steps that have to be taken when trying to move forward from this. 

"The Federal Reserve does every six weeks is meet and talk about, interest rates and so prior to this weekend, they, the markets largely expected an interest rate hike next Wednesday of another 50 basis points and that's largely off now," Valcarcel said. 

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