Concerns grow about Credit Suisse overseas
The collapse of Silicon Valley Bank is triggering new worries about worldwide financial trouble. Overseas, Credit Suisse's troubles rattle financial markets today. The Dow dropping more than 700 points before recovering about half of those losses late in the day. CBS2's Dick Bannon here now with more on what is being done to ease those fears. The Rocky Day on Wall Street was driven by fears about the potential for a global banking crisis. Credit Suisse, one of Europe's largest banks, is fighting to stay afloat over funding concerns. This comes after the failure of Silicon Valley Bank in the U.
S. and two credit rating firms have cut First Republic Bank to junk status. Stocks of the Big Four U.S. banks took a hit today too. The issue with banking is that so much of it is relying on confidence. And we have to really look out for what are the other potential dominoes that could tumble if Credit Suisse comes under continued pressure.
Larger U.S. banks have been flooded with new deposits after the collapse of SVB. Bank of America reportedly received more than $15 billion. J.P. Morgan has seen billions as well.
How concerned should Americans be right now about what's going on in the banking industry? I think the most immediate risk that many Americans worry about is, are my deposits safe? My checking account, my savings account, my bank? Fordham Law, corporate bankruptcy professor Richard Squire says the average investor is safe. If those accounts don't exceed the balances, the $250,000 FDIC insurance limit, there is no risk to those accounts. There's no reason to believe that the FDIC and the Federal Government won't honor those insurance limits. They always have, and I think they always will. In Washington, the Senate Banking Committee will hold hearings. We want to get all the facts in, and I think that's where oversight comes into play. And lawmakers want Silicon Valley's executives held accountable.
They almost cratered our entire banking system. They paid themselves bonuses, even as their bank was collapsing. And Senator Blumenthal also says that they've introduced legislation aimed at those failing banks. If passed, it would claw back any bonuses or profits earned from stock sales within 60 days of a financial firm's collapse. Christina Morise.
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