00:00There is always a lesson, right?
00:02Well, the collapse of Silicon Valley Bank and subsequent financial fallouts are a cautionary tale for how to handle our
00:10personal finances.
00:11Quote, the first line of defense should always be cash, unquote.
00:152050 Wealth Partners Lizetta Braxton tells CNBC.
00:19In what Braxton calls, quote, a great case study, unquote, for clients, the problem occurred when SVB couldn't cover its
00:26clients' withdrawal requests.
00:28The bank was forced to sell its treasury bonds before maturity at a steep loss.
00:32For clients, this translates to us as having a good emergency savings, typically three to six months of expenses ready
00:40for the unexpected.
00:41Very focused banks can serve a niche customer but are subject to high risk.
00:46Same goes for us in terms of our investments.
00:48A diversified portfolio can help protect you from risk.
00:53As New York Times technology writer Kevin Roos highlights, bank regulation worked in this case.
00:59SVB customers who had $250,000 or less deposited in insured accounts were able to access those funds quickly due
01:07to FDIC insurance.
01:08Keeping your money in a non-regulated account may not offer the same protections in a bank failure.
Comments