Tuesday, April 4, 2023, 00:41
The crisis at Silicon Valley Bank (SVB) and Credit Suisse has revived fears of the 2008 financial crisis. And while the two situations present many differences, mistrust has set in among investors, and threatens to spread to investors as well. savers due to possible contagion to the Spanish financial system.
The general fall in the shares of banks is “alarm signal”, but it does not mean that they are going to fail, they maintain at HelpMyCash.com. Financial comparator experts offer some tips to protect savings in these types of situations. It is mainly about taking “preventive measures” such as these:
1. Distribute the money in several entities
Having the money distributed in several bank accounts of different banks reduces the risks not only in case of bankruptcy, but also if, for example, your system crashes due to computer errors or the client is the victim of a financial scam.
That is why at HelpMyCash they advise – whenever our financial possibilities allow it – “to have at least two accounts in different banks, and never more than 100,000 euros per bank and per owner”.
It should not be forgotten that, although in Europe there is a deposit guarantee fund that protects against possible banking contingencies, it only covers up to 100,000 euros per financial institution in the event of bankruptcy. If they do not exceed that threshold, customers will be protected.
2. Avoid panic
Banking crises are fed back with panic, and it is normal for savers in these situations to think about withdrawing their money from the bank. HelpMyCash experts do not consider it necessary “if there is no real risk of bankruptcy”. Withdrawing savings can be counterproductive, because if they flock, then it would create a liquidity problem in the bank that could end with its bankruptcy. It is a clear example of a self-fulfilling prophecy.
3. Have an emergency fund
It would be something similar to a ‘mattress’ that allows us to live between three and six months without having to resort to savings for other purposes. It is also a useful instrument for investors. «The economy is cyclical and if the need for liquidity arises when investments are at minimum prices, the investor will have to sell them and lose money. If you have an emergency fund, avoid assuming this risk, “they say from the comparator.
4. Stay informed
To make rational decisions and in the medium-long term it is very important to stay informed. And even more so in these tremendously changing situations. Of course, an effort must be made to verify the sources, since “informing yourself is dangerous” and can push us to make bad financial decisions.
The advice of the HelpMyCash experts is to “verify the sources of information and, if using social networks, it is better to look for trusted sources”.