“This is not 2008:” Financial expert assuages fears over Silicon Valley Bank collapse
WASHINGTON (Gray DC) - It’s been a tumultuous week for the stock market, as the dust settles after the collapse of Silicon Valley Bank.
Anxiety lingers about the health of our nation’s smaller banks - prompting many investors to pull their deposits.
But experts agree: This isn’t 2008, and Silicon Valley Bank isn’t Lehman Brothers.
After the 2008 crash, federal regulators set up safeguards to prevent future catastrophic collapses.
Federal regulators are stepping in again - but this time to stop a leak, not a flood.
“Every American should feel confident their deposits will be there, if and when they need them,” said Biden.
The response comes after investors got spooked last Thursday, pulling $40 billion dollars in deposits.
Economist Mark Zandi says that’s bad news since faith in the system is what keeps it afloat.
“Priority number one is confidence in the banking system. If you lose that, then it’s going to be a complete mess,” said Zandi.
Financial author Ari Rastegar says if you did get spooked by what happened, you have options.
“Go to a big bank that has those controls that are overlooked by the Federal Government and do an incredible job of making sure that their consumers are safe,’ said Rastegar.
This mini-banking crisis might also have some positive effects for homebuyers.
This week we saw mortgage rates actually drop.
According to BankRate, a 30 year mortgage now sits at 6.3 percent, which is down from nearly 7 percent in November.
The reason is market expectation shifts, and treasury bond yields.
Copyright 2023 Gray DC. All rights reserved.