Joelle Leclaire and Fred Floss, professors in Buffalo State University’s Economics and Finance Department, weighed in on the recent collapse of two banks with WIVB-TV Channel 4 reporter Sarah Minkewicz on March 14.
The segment provided local context to the demise of Silicon Valley Bank, based in Santa Clara, California, on March 10, followed by the closure of Signature Bank in New York City on March 12.
Leclaire and Floss both noted that for the average person, such a bank collapse is not a huge concern, because anything less than $250K is insured by the Federal Deposit Insurance Corp. (FDIC).
“The system is really created to safeguard the everyday person more than ever before,” Leclaire said, adding that the news will likely cause fluctuation in the stock market. This could affect workers near retirement because the total assets in their retirement portfolio could decrease.
Floss echoed that but noted that while the stock market will fluctuate, “most people are going to be well diversified, and they’re going to find they have very little problem with their 401(k).”
Photo by Adam Nir.