As a customer of a bank, it’s natural to feel concerned about the bank’s financial stability, especially when news of bank failures or liquidity issues hit the headlines.

Recently, Silicon Valley Bank, a California-based bank that specializes in lending to startups and tech companies, announced that it had failed to meet a regulatory requirement for capital adequacy. This news has understandably caused some concern among its customers and has led to questions about the safety and stability of other banks.

So, should you be worried about your own bank’s liquidity in light of Silicon Valley Bank’s failure? The short answer is that it depends on the specifics of your bank and its financial situation.

Here are a few key factors to consider:

  1. Regulatory requirements: Banks are subject to strict regulatory requirements around capital adequacy and liquidity. The specific requirements vary depending on the bank’s size, business model, and other factors. If your bank is meeting or exceeding these requirements, it’s likely that it’s on solid financial footing.
  2. Diversification: It’s generally a good idea to spread your money across multiple banks and accounts, rather than keeping all your eggs in one basket. This helps to mitigate the risk of any one bank’s failure or liquidity issues impacting your finances. Additionally, if one bank fails, depositors are often protected by government insurance programs, such as the FDIC in the United States.
  3. Transparency: Some banks are more transparent than others about their financial health and risk management practices. If your bank is open and forthcoming about its financial situation and risk management practices, it may be easier to assess its stability and make informed decisions about your deposits.
  4. Size and complexity: Larger and more complex banks may be more susceptible to liquidity issues, as they often have more interconnected relationships with other financial institutions and may be involved in riskier activities. Smaller, more focused banks may be less likely to experience liquidity issues, but may also have fewer resources to weather economic downturns.

Ultimately, it’s important to do your own research and due diligence when choosing a bank and assessing its financial stability. Look for information about the bank’s regulatory compliance, diversification, transparency, and size and complexity, and consider spreading your deposits across multiple accounts to mitigate risk.

While Silicon Valley Bank’s failure may be concerning, it’s important to remember that not all banks are the same, and some may be better positioned to weather financial challenges than others.

Jeff Hammerberg is a distinguished entrepreneur and broker, and the visionary founder of For over 25 years, he has been a prolific writer, coach, and author who has been instrumental in advancing the cause of fair, honest, and equitable representation for all members of the LGBTQ+ community in real estate matters., which he established, is the largest and longest-running gay real estate agent referral service in the nation, boasting over 3500 LGBTQ+ realtors who operate in cities across the United States. His commitment to promoting inclusivity and accessibility in real estate has earned him a reputation as a passionate advocate for the LGBTQ+ community.