Michigan banks will not be caught up in the ripple effect of bank failures in other parts of the country. That is the prediction of a University of Michigan expert on detection of risk in banking.
According to the U-of-M business professor, there are few similarities between Michigan banks and those that failed across the country the past few days.
Amiyatosh Purnanandamsays Michigan banks don’t fall into the category of those, like Silicon Valley Bank, that took on too much risk, were heavily invested in cryptocurrency, and had customers mostly in the troubled high-tech sector who were in need of their money.
“Most banks, most Michigan banks, my informed guess, have reasonably well diversified bank of depositors, so it’s unlikely that they are withdrawing their money at the same time."
He says if there had been tighter regulations, the lack of deposits would have been noticed before the banks collapsed over the weekend.
He said he wouldn’t be surprised if the bank failures will trigger calls for renewed regulation in the banking industry.
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