In the wake of the collapse of Silicon Valley Bank, President Biden is reassuring Americans that the banking system is safe, despite regulators rushing to prevent failures at other financial institutions.
Finance professor Michael Goldstein from Babson College has weighed in on the situation, suggesting that anyone with accounts at Silicon Valley Bank or Signature Bank should move their money to another bank immediately.
However, Goldstein does believe that taxpayers won’t have to foot the bill for depositors at the failed banks, as the FDIC will charge an extra fee to the banks.
These bank failures are tied to the rising interest rates over the past year or so, but Goldstein still thinks it would be best for the Fed to raise interest rates by only a quarter-point, if at all, to avoid signaling that all banks are in trouble.
