Bank regulators face a grilling on Capitol Hill while calming markets and the public
Bank regulators face a grilling on Capitol Hill while calming markets and the public
Bank regulators in Washington have quite a job ahead of them this week. Officials from the Federal Reserve, Treasury and Federal Deposit Insurance Corp. will head to Capitol Hill for hearings in the Senate on Tuesday and the House on Wednesday. They’ll have to answer what are sure to be some pointed questions from lawmakers.
But they’ll also have something of a PR job to do: convince the markets and the American public that everything’s going to be OK.
Banking regulators want everyone to just calm down — especially depositors at smaller banks, who have been pulling their money out lately — to the tune of $120 billion — the week after Silicon Valley Bank failed.
Officials need to get a few messages across, said Sean Neary with communications firm Edelman Smithfield: “The system has worked, that they have had the ability to step in when necessary, and communicate the actions that they have taken to rectify and repair the system,” he said.
Because even though SVB’s customers didn’t lose a penny, “there still is — even to this day — a lack of confidence,” Neary added.
And that lack of confidence could turn into another crisis if fear takes over.
Like many experts watching all this go down, Anusha Chari, a professor of economics and finance at the University of North Carolina at Chapel Hill, doesn’t think it’s time to go stash your cash in the mattress.
“There’s definitely been a big hiccup. But as far as the overall banking system is concerned, I do think that SVB was an outlier,” she said. “My belief is that the overall trust in the banking system continues to remain high, except for these pockets of vulnerability.”
But if you’re still worried, maybe you should talk to a therapist — like financial therapist Megan McCoy at Kansas State University.
“Understand that if you’re experiencing anxiety, it’s probably from a whole bunch of experiences you’ve had over the last couple of years. And tackling those other things head on will really help alleviate any stress and worry you have today,” she said.
So instead of running to the bank to take out all your money, what you might need is more of a financial mental health break.
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