Local analysts reassure residents amidst financial crisis
CHATTANOOGA, Tenn. (WDEF) — This weekend saw two major banks shut down, causing heavy economic stress. Panic spread and there was fear of another economic collapse.
But due to fast-action by the FDIC, Federal Reserve and the Treasury Department, there is little sign for worry.
Co-Founder of Apogee Wealth Partners, Chris Hopkins, said that there should be no worry for Chattanoogans right now. “For those of us here locally, we kind of view it as a west coast, Silicon Valley sort of impact. That’s how it started. It had to do with risky start-up businesses dealing with a risky lending institution in Silicon Valley Bank.”
There is still information coming out about the regulation of Signature Bank and Silicon Valley Bank, and if there were any missed red flags. But this may also place smaller banks in the hot seat of investigation.
“And I think small and medium banks should probably be prepared for a little more regulation in terms of the kind of capital they have to hold, and in particular the kind of investments they can make with depositors money,” Hopkins continued.
While this weekend provided much to learn from and reflect on, there is a slim chance that it will lead to a complete collapse.
“There are a lot more regulations, so the odds of something like that happening are much smaller and the seeds of that financial crisis don’t exist either,” Hopkins said. “There was a lot of speculative issues of security, the mortgage market was out of control and the derivatives market was out of control. That has not happened, we’re not near anything like that. So, the odds or the chances of a big financial crisis as a result of this are minuscule. I’d say zero.”
Discussions on how to move forward are still happening, but as of now there are no direct effects for Chattanooga banks.