Is the banking system in America collapsing? The recent closure of Silicon Valley Bank and Signature Bank, combined with the loss of confidence and sale of Credit Suisse has sent shockwaves through the global financial system. 

Fran Racioppi brings back Episode 91 guest and former Chief Innovation Officer at the Federal Deposit Insurance Corporation (FDIC) Sultan Meghji, to answer the questions we are all asking: why are banks failing? Should we be concerned about our money? Are taxpayers footing the bill? When should we worry? 

Learn more about Sultan Meghji on LinkedIn and Twitter @sultanmeghji.

Check out The Jedburgh Podcast Website. Subscribe to us and follow @jedburghpodcast on all social media. Watch the full video version on YouTube.

Highlights:

-0:00 Welcome back to The Jedburgh Podcast 

-1:51 Don’t worry about your checking account

-4:26 The banking crisis interest rates explained

-6:37 Mortgage backed securities and the changes since the 2008 financial crisis

-8:14 The failure at Credit Suisse

-9:48 The role of the FDIC

-14:10 Are taxpayers footing the bill?

-15:32 What will cause a run on the banking system?

-17:45 Why Sultan only fears defaulting on the debt ceiling

Quotes:

-”Don’t worry about your checking account….Don’t stress about it. It doesn’t matter if it has $1 in it or a billion dollars in it.” (2:02)

-”Having the single largest increase in federal reserve interest rates in human history has caused a tremendous imbalance in a subset of the banks in the United States.” (3:15)

-”We don’t have a banking crisis. We have a psychological issue right now.” (3:43) 

-”You can trace the balance sheet problems for Silicon Valley Bank directly back to the increase in Federal Reserve interest rate hikes.” (6:27)

-”When the US Government took it over, it just took them a few days to reboot the computer.”   (11:42)

-”You should have money in one of the big systemically important banks. You should have money in a credit union. And you should have money in a midsize regional or community bank.” (12:57)

-”Literally the only thing that I would ever worry about…is if somehow the US defaulted on the debt ceiling.” (17:45)

This episode is brought to you by Jersey Mike’s, Compass Workforce Solutions, 18A Fitness