Don’t worry if you don’t have more than $250,000 in your account or if you have chosen one of those rare banks that are not members of the Federal Deposit Insurance Corporation.
In the case of Silicon Valley Bank and Signature Bank, which were members of the FDIC, the authorities said they would make an exception and ensure depositors get all their money, even amounts above $250,000. The action was aimed at quelling panic and massive bank runs. There were many contributors in Silicon Valley with well over $250,000.
It is possible that the Feds could increase the current guaranteed deposit limit on a larger scale, as they did during the 2008 financial crash.
Many companies hold more than the FDIC insurance limit in banks. So when it comes to your salary, it depends on how carefully your boss chose the lender. And how much attention your employer pays to what the bank does.
Among other issues, Silicon Valley Bank and Signature had significant access to the cryptocurrency markets, which made them exceptional in the banking world.
However, as lenders with less than $250 billion in assets are exempt from more stringent stress tests and liquidity requirements, it’s unclear how many banks could be vulnerable.
What is known is that the Fed’s rapid rate hike — the fastest in four decades — left banks with more than $600 billion in unrealized securities losses late last year.
However, the Fed’s move over the weekend to support the liquidity of banks holding safe haven assets such as Treasuries should help cap the spread. And the big banks, which were the source of problems during the 2008 crisis, “are likely to be more resilient this time around,” analysts at Capital Economics said.