Concerns Still Exist in Local and Regional Banking System

Aug 8, 2023

Hi, my name is Ed Moy and I served as director of the United States Mint from 2006 to 2011. I'm also the senior IRA strategist for U.S. Money Reserve. The recent closure of PAC West Bank shows that some mid-size and regional banks are still having problems. These problems stem from the Federal Reserve quickly raising interest rates to slow down the economy to try to bring down inflation.

Higher interest rates have a bigger impact on small, mid-size, and regional banks, and that's because their smaller size limits their access to some financial instruments that could help them hedge against the risk of higher interest rates on their business model. And when customers start to lose trust in their bank, they also start to pull out their money, which further weakens the bank or even can force the bank to close.

And when one bank closes, that could lead to other bank closures as customers start to fear for the possible loss of their deposits. This happened with the collapse of Silicon Valley Bank and Signature Bank this past March. Then First Republic struggled and was sold to JPMorgan Chase in July. Now struggling PAC West Bank will be merged with the much smaller Bank of California.

Small, mid-sized, and regional banks are important to the U.S. financial system, and most are on solid ground. But to help build more consumer confidence in these banks, Congress is considering reforms that would increase the insurance on deposits as well as improve regulatory oversight to catch these problems earlier, but nothing has passed yet. Until these problems are addressed, how can individuals like you and me minimize the impact of future problems in the banking system on our hard earned money?

This is especially true with your retirement savings because no one knows what the future holds. One time tested strategy is diversification. For example, individuals can reduce the banking risks by depositing into several different banks, but that can also be cumbersome. Another example is to diversify into some assets that are held outside the banking system, like precious metals. Physical gold and silver come to mind.

A precious metal IRA keeps a portion of my retirement safely outside of a bank account, and mine is from U.S. Money Reserve. If you're interested in exploring this option to protect your retirement investments from the potential negative impact of a banking crisis, then call 1-866-646-8465 and ask to speak to a U.S. Money Reserve IRA specialist.


Sign up now for latest executive insights and latest news delivered right to your inbox.

  • This field is for validation purposes and should be left unchanged.

Related Articles

Growing Personal Debt Spells Potential Trouble

Growing Personal Debt Spells Potential Trouble

Here's something I learned while working in Washington, D.C.: when everyone seems to agree on a fact, it's time to get skeptical and go to the data. Here's a recent example. If you follow the business news, you know that consumer debt has climbed to the levels that...

read more