Let’s talk about what’s going on in the markets and the economy after the recent bank failures.

Quick Recap: Over the last few weeks, several banks have collapsed under the pressure of bad management, high interest rates, portfolio losses, and a run of depositor withdrawals.

Since then, regulators, governments, and other major financial institutions have stepped in to take over troubled banks and guarantee deposits.1,2

It has also emerged that Silicon Valley Bank (the first to fall) had already been under regulatory review by the Federal Reserve for more than a year about the very issues that triggered its collapse.3

One of the possible silver linings of these failures is that other small institutions with similar problems are probably looking very hard at their books and reassessing their strategies to avoid a similar fate.

Will these bank failures trigger a recession?

I wish I had a simple answer for you. In the short term, it doesn’t look like these problems are big enough to threaten the overall economy.

In fact, banks fail almost every year without triggering serious problems. According to the Federal Deposit Insurance Corporation, 563 banks have failed since 2001.4

However, if banks get stricter about lending (as they did after the 2008 financial crisis) and the cost of getting loans increases with higher interest rates, the end result could be slower economic activity.

If employers get leerier about hiring workers or Americans get more cautious about their spending, that could also take a bite out of the economy.

What happening with markets?

After giving in to fear and selling off, global markets rebounded after regulators and central banks stepped in to stabilize the situation.

The Fed hiked interest rates a quarter of a point at their most recent meeting (as expected), and indicated that they might be pausing increases later this year.

Markets reacted positively to the news, buoyed by hopes of an end to higher interest rates, but let’s not be surprised by more volatility when it comes.5

Bottom Line: There’s a lot going on in the world, and markets are caught in a whipsaw of good news and bad. We’re keeping an eye on trends and will update you as needed.

That’s why we stand behind our Financial House approach to retirement planning. We focus first on your Foundation by analyzing your income and expenses, helping you define your basic needs and designing a written income plan you can’t outlive, giving you emotional protection.

Then we shift our focus to your Walls, or your principal protection, designed to grow steadily while not losing value when the market is down. This allows you to offset inflation and continue to build a lifestyle you enjoy.

Times like these we’re currently living are why we designed the Financial House. Because the first two steps shouldn’t be affected by the goings on around us. Wall growth may slow, or even stop, but you don’t go backwards.

Only then do we focus on investing in the Roof, or your investment plan. Once your Foundation (needs) and Walls (lifestyle) are in place, we review your remaining assets to help you set financial growth goals moving forward.

If you have any questions or concerns about what’s going on in the markets and economy right now, or if you’d like to review your Financial House to make sure you’re where you’d like to be, please give our office a call at (435)773-9444 and schedule a time to speak with one of our Financial Architects.


  1. Treasury Secretary Yellen says the government could backstop more deposits if necessary (cnbc.com)
  2. UBS-Credit Suisse deal puts Switzerland’s reputation on the line (cnbc.com)
  3. Fed was aware of Silicon Valley Bank problems more than a year before its collapse – ABC News (go.com)
  4. FDIC: Bank Failures in Brief
  5. Stock market today: Live updates (cnbc.com)