Wisconsin Banking Officials Reassure Customers After Two Large Bank Failures

Thursday, March 16th, 2023 -- 10:01 AM

(By Joe Schulz, Wisconsin Public Radio) Wisconsin banking officials are reassuring customers after two large bank failures in California and New York have stirred anxiety.

According to Joe Schulz with Wisconsin Public Radio, those banks primarily served the tech industry. Silicon Valley Bank in California failed last Friday, followed by Signature Bank in New York Sunday.

Many of Silicon Valley Bank’s customers needed more cash over the last year, which caused the bank to sell U.S. Treasury bonds at a loss. The bank’s precarious situation caused depositors to rush to the bank to withdraw funds, 90 percent of which were not federally insured because they exceeded $250,000.

The federal government stepped in to ensure depositors do not lose money even if their funds weren't federally insured. Despite elevated fears after back to back bank failures, Wisconsin banking officials say the state’s banks are on sound financial footing because they have a more diverse customer base and safer portfolios than the tech banks.

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