Rhode Island’s pension fund is set to lose approximately $2.5 million due to the recent collapse of two banks.
The collapse of Silicon Valley Bank and Signature Bank over the weekend has resulted in the loss of investments for the state’s pension fund, along with two other banks that are now in financial peril.
The collapse of the banks has impacted other publicly traded banks across the country, causing their stock prices to dip slightly when the stock market opened on Monday.
Although the loss represents a small percentage of the state’s $10.3 billion retirement plan, the value of the investments has cratered in the wake of the bank’s collapse on Friday.
The crisis prompted federal regulators to set up an emergency fund to protect depositors at the banks, but the fund does not protect those who invested in the banks, including the state of Rhode Island.
The investments were part of broader index funds and portfolios managed by companies like Fidelity and not individual stock purchases.
Federal regulators tapped into the emergency fund to protect depositors, which is not funded by taxpayers but rather by fees paid by banks.
Despite the collapse of the banks, President Biden assured the public that the banking system is safe and deposits will be protected.