Residents react with a mix of apprehension and hope during State Street interviews
“I don’t really have another option other than to trust my bank,” explained resident Sarah Duff in response to the recent crashes of banks here in the United States, including California.
She and other concerned residents talked to the News-Press in front of the First Republic Bank branch at 1200 State St.
Santa Clara-based Silicon Valley Bank and San Francisco-based First Republic Bank have been the main West Coast banks in the crisis. The Federal Deposit Insurance Corp. took over Silicon Valley Bank.
On Thursday, 11 of the nation’s biggest banks said they were providing a $30 billion rescue package to keep First Republic Bank afloat, but the bank’s problems remain. S&P Global Ratings announced Sunday that it cut First Republic’s credit rating to “B-plus” from “BB-plus.”
On March 10, Silicon Valley Bank failed and was closed by the California Department of Financial Protection and Innovation. This was the largest bank to fail since the 2008 financial crisis.
As of Monday, regional banks across the country had share drops. First Republic Bank, the most prominent of these, had shares drop 47%, nearly 90% down since March 8. This led the New York Stock Exchange to halt trading 11 separate times Monday.
This scare within the banking system has trickled down to other banks, and it has customers worried about the future of the country’s financial system. As a result, many people have been pulling their accounts and money from their banks.
Jorge Torres, a resident of Los Angeles, shared his thoughts during News-Press interviews in front of First Republic Bank’s State Street branch.
“The big banks will be fine because they are backed by the government. If the government collapses, though, we have a problem.”
Recently the FDIC announced a “systemic risk exception,” which would allow the government to pay back uninsured depositors to prevent consequences for the failure of the bank.
Additionally, with approval from the U.S. Treasury department, the Federal Reserve said it would set up an emergency lending program to eligible banks so they can meet the needs of their account holders.
Jenna Wheeler, a San Luis Obispo resident and Santa Barbara City College student, shared her thoughts regarding the bank issues.
“I personally have confidence in my bank because it is smaller, and my family has used this bank for years. We never have had an issue, and I project there not to be one, even with all of this happening. I also know my bank is fairly stingy with loans so that makes me feel better.”
Many customers have looked into their own banks and its history, seeing if this crisis could come to them in the near future.
“I know my specific bank has had some scandals, but I feel like it is big enough to be OK,” Malibu resident Reagan Phillips told the News-Press. “I guess I have never really known enough about the banking system to have active confidence in it or not. It has been more of passive confidence.”
President Joe Biden tried to share some relief for the country over Twitter on March 14 by saying “because of actions that our regulators have already taken, every American should feel confident their deposits will be there if and when they need them.”
As the banking crisis continues, people are reacting with a mix of apprehension and hope.
“It definitely scares me a bit, but I trust that things will work out,” local resident Jill Hurin told the News-Press. “Easier to not worry about it!”