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Economists advise next steps for Ohioans after banks collapse

The President of the Ohio Bankers League, Mike Adelman, said Ohioans do not need to be concerned about the safety of their money.

COLUMBUS, Ohio — The president of the Ohio Bankers League said people in the Buckeye State do not need to be concerned about the safety of their money after two banks recently collapsed because there was no impact on the banking system in Ohio.

Mike Adelman said one key difference is that the Silicon Valley Bank and Signature Bank usually had accounts with large amounts of money tied to one industry, unlike Ohio banks. He adds the banks are well-funded and are all backed by the federal government.

There are also legal tools that Ohio banks have access to expand that coverage beyond the protected $250,000 insured by the FDIC.

The collapses serve as a reminder for everyone to be better informed as consumers.

"I strongly encourage friends and colleagues to strike up a relationship with a local banker and pay her or him a visit, give them a call, definitely an uncertain times that we're seeing throughout our economy to just make sure that they've got that peace of mind in that bank,” Adelman said.

Kimberly Young of Young Wealth Management said the biggest impact she saw was on the stock market.

"The major thing my clients saw was obviously that it shook the stock market,” says Young.

However, Young advises to not panic during these times.

“The markets can be incredibly fickle, so yesterday was a big negative day in the market, I would have thought that maybe that would have trickled into today, but today inflation data came out positive and the market's having a really positive day,” Young said.

Young said if you have more than $250,000 in one account, you may want to diversify your accounts and spread your money out to multiple banks to guarantee full insurance.

The biggest concern she’s noticed among clients is inflation.

A recent report shows consumer prices rose 6% in the last year, creating new questions about whether the Federal Reserve will hike interest rates in the coming days.

"I am hopeful that inflation will start to ease up. Now do I think it's going to go back to the levels it was pre-pandemic? No.” Young said.

There are several contributing factors to why we’re paying more for just about everything. Young says we do not have enough supply to meet the high demand, hiking up costs. We also have a strong labor market right now, but not enough workers. She attributes this to a mass exodus among soon-to-be retirees. Families have also re-prioritized household income.

“You had people that had two incomes per household that were forced to go down to one because of the childcare situation, and then realized we're making it OK on one income, why don't we just continue that post-pandemic?” shares Young.

Young advises you to check your accounts, as a lot of big banks are not raising interest rates, so your money is depreciating sitting in those accounts. She says it may be best to consider your regional banks, who are offering higher rates to combat inflation.

"You can get a savings account right now liquid for 4% which is kind of crazy, we haven't been there in quite a while,” Young said.

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