What the recent large bank collapses could mean for banks in the MOV
With the collapses of large banks in the United States, many are wondering how this could affect banks in the Mid-Ohio Valley.
PARKERSBURG, W.Va. (WTAP) - After the collapse of banks such as Silicon Valley Bank and Signature Bank, some people are wondering if we could see another situation with bank runs like in 2008.
“A bank run would be similar to thinking that Walmart was going to run out of milk. And so, everyone runs down at the exact same time to try to get all the milk before it’s gone. Because you don’t want to be the last one standing there without being able to buy what you’re looking for,” says Hall Financial Advisors senior partner, Jeremiah Kuhn.
Kuhn says that situations like the ones with Silicon Valley and Signature are in some ways similar to 2008. However, the markets for these banks is much different. As Silicon Valley specialized in tech and Signature was invested in cryptocurrency.
Both industries that experts say have a market that isn’t stable.
“So banking, for most of it, should be a thoughtless decision. That you should be able to put your money in the bank and it should be safe and secure,” says Kuhn. “But there are risks that certain banks that specialize in customers all of one type that we need to be conscious of what is going on in an industry that you’re not putting your money in someone that is taking unwarranted risks.”
Both Kuhn and Community Bank chief executive officer and president, Susan Barber said the current situation with banks in the Mid-Ohio Valley shouldn’t be impacted by the recent collapses of the two banks. They said none of the local banks are investing in any of the markets SVB or Signature were a part of.
“Silicon Valley was heavily in tech industry, a venture capital. Signature was in cryptocurrency,” says Barber. “That is a type of lending that is not prevalent in the Mid-Ohio Valley.”
Barber also said that because of the current federal regulations and strict standards that banks are held to now, we shouldn’t see another economic crash like the one in 2008.
“We really weigh the risk,” says Barber. “We way the risk of the customers. We weigh the risk of the industry. And we do what we feel is prudent for the community and we feel what is prudent to protect the value that the shareholders have in the bank.”
Both officials said the current landscape of what banks are investing in is much different than the last bank crash 15 years ago. Not only with the newer markets available, but how quickly a bank run can happen.
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