Opinion: More need to worry about banking

Last month, what has been called everything from “troubles in the banking sector” to a “banking crisis” became apparent when the CEO of Silicon Valley Bank notified shareholders the bank needed to raise $2.25 billion after suffering substantial losses.

This precipitated a run on the bank and bank regulators placed the bank into Federal Deposit Insurance Corp. receivership.

Shortly after that, the Treasury, the Federal Reserve and the FDIC announced that New York-based Signature bank was also seized due to failing.

AP reporter Fatima Hussein notes that, “In a matter of days, a third bank, First Republic, was fortified by $30 billion to prevent more regional banks from collapsing.”

The phrase “to prevent more regional banks from collapsing” is troublesome to me as it indicates that the “crisis” may not be over. In fact, other news reports have stated that as many as 270 regional banks may be in danger of failing.

Perhaps the most interesting tidbit about the current banking difficulties is this snippet from AP reporter Christopher Rugabar:

“The Fed, the Federal Deposit Insurance Corp., and Treasury Department agreed to insure all the deposits at Silicon Valley and Signature, including accounts that exceed the $250,000 limit.”

Exactly how is that done and exactly who approves it?

U.S. officials at the highest levels assure us there is no reason to worry.

In a related story, Swiss bank Credit Suisse was forced to merge with USB Bank after also failing.

When I in elementary school, we learned that the Swiss were famous for making superb watches and clocks and for their banking system. For years Swiss banks were famous for protecting the identity of their depositors as well as their assets, and for their steadfast rock-solid banking practices.

Several years ago the Swiss were pressured into releasing the names and assets of depositors and now the famously stoic banking practices have fallen by the wayside.

The two primary reasons to bank in Switzerland are no longer valid. Why would one continue to bank in Switzerland?

The Credit Suisse failure has the potential to crater the Swiss economy. Some reports indicate that Germany’s Detushche Bank may be in trouble.

European Union officials at the highest levels assure their citizens there is no reason to worry.

When officials at the highest levels assure you there is no problem, it’s time to worry.

Rube Render is a former Clovis city commissioner and former chair of the Curry County Republican Party. Contact him:

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