Experts react to bank failure and government response
ROANOKE, Va. (WDBJ) - Federal officials acted over the weekend to address the failure of Silicon Valley Bank and Signature Bank in New York.
Monday morning, President Biden moved to reassure the public that their deposits are safe. And in western Virginia, experts on the economy and finance applauded government action, and pointed to the lessons they hope investors and government regulators are learning.
“Look the bottom line is this: Americans can rest assured that our banking system is safe,” Biden said in his televised remarks. “Your deposits are safe. Let me also assure you we will not stop at this. We’ll do whatever is needed.”
President Biden spoke about the situation in an effort to reassure the public and prevent a run on other institutions.
Here at home, Virginia Tech Associate Professor of Economics Jadrian Wooten and Hollins University Assistant Professor of Finance Lucas Long applauded efforts to stabilize the situation.
“I think the message that it tells America broadly is the banking system is safe,” Dr. Wooten told WDBJ7.
“My students, they feel like they are very concerned about the market,” Long said in an interview, “but as far as I see it, at least right now, the good news coming from the Federal Reserve, from the government, they are actually trying to help it.”
And there are important lessons to learn - about recent efforts to roll back some banking regulations, Wooten said.
“This brings us back to the idea that maybe we do need more monitoring,” Wooten said, “especially, monitoring of banks that have accounts that are uninsured.”
And from Long - the need for investors to take a closer look at a company’s fundamentals.
“This is the thing I’m trying to tell my students and tell the people who want to invest in their life is to always try to read the company’s financial statements,” he said. They have a lot of information that can tell you.”
Sen. Mark Warner (D-Virginia) is a member of the Senate Banking Committee.
He released a statement praising the actions of the Federal Reserve, the Federal Deposit Insurance Corporation and the Treasury Department.
“Their quick action,” he wrote, “will help companies make payroll and preserve jobs all across the country.”
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