The fallout from SVB continues.
After Silicon Valley Bank’s (SVB) collapse, the banking world is scrambling, the stock market has seen better days, and the Biden admin is trying to save consumer confidence in the US banking system. SVB’s shareholders are now suing the company for fraud and accusing the bank of covering up how rising interest rates left SVB susceptible to a bank run. On top of that, SVB's still looking for potential buyers. Meanwhile, Signature Bank has also closed down and many are waiting for the other shoe to drop. If you’re figuring out if you should run, not walk, to your local bank, we’re here to help answer some questions:
Is my bank at risk?
If you're stashing your funds with major banks like JPMorgan Chase, Citigroup, Bank of America, or Wells Fargo, chances are you’re fine. These banks all have more diverse deposits (which is a good thing) and have seen minimal changes since the SVB fallout.
Is my money safe?
Long story short, anyone with $250,000 or less in the bank should be safe because the Federal Deposit Insurance Corporation (FDIC) insures up to that much in eligible accounts. Those with joint accounts are covered for up to $500,000. On that note, here's how to check if your bank is FDIC-insured.
Should I start mattress stashing?
If you’re lucky enough to have more than a quarter million in cash, many experts recommend splitting it up across multiple banks. Also a friendly reminder: a bank run ($42 billion dollars worth) played a big role in SVB’s downfall.
How’s the gov responding?
The Fed, Treasury Dept, and FDIC stepped up to make sure all deposits at the affected banks — even those more than $250,000 — will be returned. The Fed also said it’s creating a special loan program that protects other institutions from a potential bank run or the fallout. Meanwhile, there could be new banking regulations in the works as Congress looks into SVB's downfall.
Many are clutching their debit cards and getting 2008 flashbacks after two medium-sized banks failed in the span of a few days. But there are more regulations to keep a crisis like that at bay, and federal officials are saying new emergency measures should help stabilize the banking system.
Who climate activists aren’t happy with…
President Biden. Yesterday, he approved the Willow oil-drilling project in Alaska. The $8 billion project, led by oil giant ConocoPhillips, has the capacity to produce more than 600 million barrels of oil over 30 years. All that oil, if burned, could release nearly 280 million metric tons of carbon emissions — the equivalent of putting about 182 gas-powered cars on the road every day. Alaska Republicans and Democrats applauded the project's approval, saying it could create hundreds of new jobs. But environmentalists and climate activists denounced the project as a “carbon bomb.” They're expected to sue and have called Biden out, saying he campaigned to ban new drilling on federal land and promised to reduce the US's carbon footprint. The Biden admin said it couldn't have blocked the project, since ConocoPhillips has leases on the land.
It's snow good: Over the weekend, Biden announced the US Arctic Ocean was off limits to future oil and gas leasing in an effort to appease critics. But many called the move a “performative action.”
What’s a cause for concern…
Infant deaths. Yesterday, a new study found that the rate of sudden unexpected infant deaths (SUIDs) jumped for Black babies in 2020. Each year, about 3,400 babies die from sudden infant death syndrome (SIDS), accidental suffocation, and other unknown causes. Now, researchers have found that the SUID rate for Black babies during the first year of the pandemic was nearly three times higher than the rate for white babies. Researchers said the increase could be the result of how SUIDs are classified. It's not clear if the pandemic, which disproportionately affected communities of color, played a role in the increased rate. In the meantime, researchers are also putting a spotlight on unsafe sleep practices, which are often associated with SUIDs.
Who people are remembering…
Former Rep. Patricia Schroeder. Yesterday, the women’s rights pioneer died from complications of a stroke. She was 82. In 1972, Schroeder was first elected to Congress in Colorado. Throughout her 24 years serving in the House, she championed bills like the Family and Medical Leave Act of 1993, which provides up to 12 weeks of unpaid leave to care for a newborn, sick parent or child. She also helped pass the Pregnancy Discrimination Act of 1978, which bans discrimination in the workplace on the basis of pregnancy. Schroeder was also the first woman to serve in the House Armed Services Committee. She’s being remembered as a trailblazer, with one official reportedly saying, “Every woman in this house is walking in her footsteps.”
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