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Missouri, Columbia have no money in failed California bank


The governments for the state of Missouri and City of Columbia don't have to worry about whether they're going to lose money from the biggest American bank collapse in decades.

Missouri State Treasurer Vivek Malek said this week the state has no investments in the failed Silicon Valley Bank. The collapse of Silicon Valley Bank and Signature Bank last week has dominated financial headlines this week, becoming political fodder and causing market jitters.

Likewise, the City of Columbia has no money in either of the failed banks, a spokeswoman said Thursday.

The FDIC has fail safes in place in an off-chance a bank fails. Balances up to $250,000 are insured by the Federal Deposit Insurance Corporation. This is meant to give people who experience a bank closure the ability to access their funds.

Jackson Hataway, president of the Missouri Banking Association, said banks in the Midwest are a lot more stable and solid than some on the east and west coast. This is due to the types of loans given out.

"If you look at Missouri banks, we've got banks that are doing agriculture lending, community lending, business lending. They're doing consumer lending, they're very diversified," Hataway said. "Rather than seeing some type of concentration in one area or sector, we've got banks supporting the needs of communities around the state."

With things like farms, rural areas and metro areas throughout Missouri and the rest of the Midwest, banks are servicing everyday people instead of mainly venture capitalist companies.

"Now the most important thing to remember about Missouri banks is that we are well capitalized, we have strong liquidity, and we have very diversified banks," Hataway said.

Nathan Mauck -- a finance professor at University of Missouri-Kansas City -- said the collapse of the two banks came out of a panic when people pulled all their money out quickly, and doesn't expect this to be a norm we see.

"This is more of a product of interest rates going up and banks can manage that," Mauck said. "Even if they're not, our deposits are safe because of FDIC insurance, so there's no reason to panic and no reason to try and get money out of the bank." 

Silicon Valley Bank collapsed Friday, creating the biggest bank failure since 2008.

Two days after the Silicon Valley Bank failed, Signature Bank in New York was shut down by regulators. This was the third-largest bank failure in United States history.

According to the Associated Press, Signature Bank board member (and former congressman) Barney Frank said the final blow to the bank was a panic that started after the Silicon Valley Bank collapse.

Federal officials this week guaranteed those bank customers access to all their money, not just the $250,000 on each account insured by the FDIC.

The Federal Reserve announced there will be an emergency lending program designed to ensure banks can meet the needs of their depositors.

Article Topic Follows: Economy

Ethan Heinz


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