Metro Detroit finance expert reacts to SVB, Signature Bank collapsing
(CBS DETROIT) - "A lot of people are nervous how this will impact their portfolio," said Nicole Narkus, a certified finance advisor at Raymond James in Harrison Township.
Narkus said her clients have been calling all morning, worried about the recent collapse of Silicon Valley Bank and Signature Bank.
"The first part of the conversation is really reminding them to stay calm, be patient," Narkus said.
Silicon Valley Bank, a funding source for tech startups, and Signature Bank, a popular funding source for the legal industry, experienced what's known as a "run." A run is a large number of customers withdrawing funds at the same out of fear the bank is running out of money.
The likely reason is that higher interest rates negatively affected bonds the banks have been issuing, which resulted in huge losses. Once word got out, withdrawals ensued.
While Silicon Valley Bank is a private company, it's possible consumer investors have holdings in some of the companies that banked with the defunct banks, such as Etsy, Roku, Zip Recruiter, Pinterest and Shopify, to name a few.
However, those stocks were stabilized after the FDIC and the Biden Administration gave assurances that depositors will be able to access their money.
Narkus said she understands her customers' fears in light of the recent financial crisis. However, she also said she advises them not to make emotional financial decisions.
"Be patient. The market will take care of this, and not to make any emotional decisions," Narkus added.
