OXFORD — This morning Asian and European markets are continuing to feel the global aftershock of Silicon Valley Bank (SVB) and other failures as they open lower.
In the states, the outlook is not much better as there is no proof the threat of more bank failures is over.
News Center 7′s Nick Foley spoke to Miami University economics professor EJ Ume about the problems at banks like SVB and First Republic and events internationally at Credit Suisse and what it means for the average person.
Ume says so far, in the U.S., the issue has been isolated to smaller institutions with larger deposits and that he believes the federal government has done the right thing in keeping the issue at bay.
“These are high net-worth investors—people who have deposits of greater than 250 thousand, which was the case with SVB. And so, they were withdrawing their funds looking for a central place to park them. And so, you see a lot of deposits coming out of these small banks, being deposited at the big banks who are flushed with liquidity, and don’t have these issues. And so again, there’s some panic, there’s some fear,” says Ume.
We’ll have more this week on the banking crisis and how it could affect the average consumer in the near future.
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