3 major risks still facing banks and why you should care

By Karl Evers-Hillstrom

The U.S. financial system is still reeling from the collapse of Silicon Valley Bank (SVB) and Signature Bank, the second- and third-largest bank failures in history. Despite the turbulence, regulators and bank executives say they don’t foresee a repeat of the 2008 financial crisis — but they’ve cautioned that the banking sector isn’t out of the woods yet….“There’s clearly continuing market jitters,” said Karen Petrou, managing partner at research firm Federal Financial Analytics. “If there are surprises in earnings, particularly for some of the regional banks where markets are particularly spooked, that could start another run or market reaction.” As banks seek to bolster their deposits, they face heightened competition for cash. Rising interest rates are making bonds, money market funds and other investments a more lucrative place for individuals and businesses to store their money. Regional banks are paying upwards of 5 percent interest on certificates of deposit — where an individual pledges to keep their money in the bank for a fixed period of time — up from less than 1 percent just a few months ago.