The banking industry has been going through a bit of chaos lately.  During the financial crisis of 2007-08 it was several big banks that found themselves in trouble and needed a government bailout to survive. They had too much of their money invested in risky sub-prime mortgage loans that were falling into default.  This was getting them into a position where they didn’t have enough cash on hand to manage things if too many of their depositors were to come and withdraw their funds.  That’s why Congress passed the Dodd Frank Act, which required a higher level of oversight on banks.

Only two days after SVB failed, Signature Bank ran into a similar situation by having too much of their portfolio invested in the volatile crypto currency world.  Then came Credit Suisse, who lost some of their backing support for making risky investments.  Banks are failing more rapidly than I expected I would ever see again.

So what does all of this mean for you?  Probably nothing at all.  The average person in the U.S.  has much less than $250,000 deposited in any one financial institution.  Anything up to $250,000 is protected by the Federal Deposit Insurance Corporation.  And it is highly unlikely that anyone would need to take all of their money out of the bank at the same time.  That’s just not how the financial world works in the 21^st century.  It’s entirely possible that more banks may fail.  It may be soon.  It may be far down the road.  But it will probably happen as long as banks are making poor investment decisions (always diversify your investments!!).  I suspect we may be in for a bit of a rocky road for the foreseeable future.  But I don’t think it will affect most average people. And right now I’m happy to be average.