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INSIDE THIS ISSUE
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Financial Professionals: Our Summer Plans Include You! Host an Unforgettable Murder Mystery Dinner Tax-Savvy Way to Pass Down a Family Business Invest Smarter in 4 Simple Steps Salmon Croquettes With Dill Sauce A Safe Banking Tip for Business Owners
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PROTECT YOUR MONEY FROM BANK FAILURE!
A Lesson for Business Owners and Money Managers The government came through for depositors who took a risk with SVB (and Signature Bank, which failed shortly afterward). But it was not required to do so. It seems unlikely federal regulators will offer the same compensation to depositors if more banks fail. This is a sign to business owners and money managers: Do not put all of your eggs in one bank basket. How to Keep Your Money Safe Never deposit more than the FDIC-insured limit of $250,000 “per depositor, per insured bank, for each account ownership category” with a single bank. Split up your funds between multiple banks to make sure they are fully insured. That way, you will have government protection if more banking institutions go the same way as SVB and Signature Bank. To learn more about recent bank failures and their impact, tune in to The New York Times podcast “The Daily” and listen to the episodes from March 14, 17, and 22.
This March, one of the biggest banks in the country collapsed, and business owners lost millions — at least, they thought they did. You likely followed this story closely, but if not, here are the Cliffs Notes every financial professional should know. Silicon Valley Bank’s Demise Silicon Valley Bank (SVB) was 40 years old at the time of its failure and held roughly $209 billion in assets. It had a reputation for funding small businesses and startups and encouraged its members to bank exclusively with SVB. This led many companies to deposit funds well beyond the $250,000 the Federal Deposit Insurance Corporation (FDIC) insures in case of a bank failure. The TV streaming giant Roku, for example, held $487 million in assets with SVB. SVB collapsed after what The New York Times describes as “emergency moves to handle withdrawal requests and a precipitous decline in the value of its investment holdings [which] shocked Wall Street and depositors, sending its stock careening.” The FDIC took over the bank, and in an unexpected move, the federal government announced SVB depositors would get all of their money back — not just the insured $250,000.
A LESSON FROM SILICON VALLEY BANK’S COLLAPSE
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