When the U.S. savings and loan crisis hit in the 1980s, I was reporting for my hometown newspaper, the Evening Sun, in Baltimore.
The city editor sent me out to interview depositors of one failed thrift. I’ll never forget arriving and seeing angry, confused and teary-eyed customers waiting in lines stretching for several blocks. It was a scene replicated hundreds of times as the crisis played out, while interest rates and inflation rose.
On Friday, a run on deposits led to the closure of Silicon Valley Bank, making it the second-largest bank failure in U.S. history. The bank was shut down by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
“Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds,” the FDIC said in a statement.
The situation provides an opportunity to remind depositors how much of their money is protected by the federal government.
Wondering how safe your bank deposits are? Here’s a primer on FDIC insurance.