TROY, Ala. (TROJANVISION) — Recently, there has been a lot of talk about national banks and their failures, but do people actually know the reason behind the failures?
President and CEO of the Alabama Bankers Association (ABA) says national banks were investing in a lot of startup tech companies.
“That bank had a lot of eggs in one basket,” said President and CEO of Alabama Bankers Association Scott Latham. “A lot of the the companies and the people that it did business with were in one segment of an industry.”
Although the current bank fallout is being compared to the 2008 financial crisis, Associate Professor of Economics at Troy University John Dove believes it’s too early to jump to that conclusion.
“Right now there don’t seem to be any strong indications that this is something that is systemic within the banking industry itself,” Dove said. “Time will tell.”
Some people may be wondering how they can stay safe and be more aware about their banking institution. Latham says Alabamians have nothing to worry about but all they have to do is ask questions and find resources.
Another question that seems to come up is “will Alabama banks ever get to the point the national failed banks have?” According to Dove, it’s hard to determine what some of the signs may be, but things in the banking industry could change.
“The real question is ‘is this something that has become systemic within the banking industry’,” Dove told TrojanVision. “We’re not one-hundred percent sure of that. “This is also why you hear a lot of talk about the Federal Reserve and what the Federal Reserve is trying to do to fight inflation. If this is something that is systemic within the banking industry, then it’s going to make the Federal Reserves fight against inflation much tougher.”