Latest update September 24th, 2026 10:31 AM
Banking jitters
Editorial…
Kaieteur News – Everything was rosy, until suddenly they were not. Naysayers harped about the overblown stock market, while prophets of doom warned about a day of reckoning overdue. Some shrugged; others laughed, most ignored, and went about their business with confidence. Then there came two bank failures in the US, and overnight, the world abruptly transformed into this dangerous and frightening place. On the heels of the collapse and closing of Silicon Valley Bank in California, and Signature Bank in New York, Credit Suisse had to get a capital injection of US$53.7B from the Swiss central bank, in efforts to stabilize the struggling bank, and to tamp down on fears of an emerging global banking crisis.
The sources of the two shocking bank failures in the US sound familiar like mismanagement by bank executives, bad policy decisions, failing to consider properly and timely the changing economic climate, being left several steps behind the curve, and laden with a bag that cannot be carried. Inevitably, panic steps in, the public runs forward to takeout their money, only for them to stare at locked doors, and bank chiefs unavailable to face their wrath. What was sweet is now sour with a bite, and the good times are dead and gone. They are gone when startups react to a dried up funding environment, and are forced to tap into their bank deposits. The good times evaporate when interest rates rise, and the bond portfolios of banks decline in value. Already overstretched financial institutions are suddenly compelled to face reality and come to grips with the consequences of their wrongheaded visions, and their slow-footed actions, when their once sure bets (lending or investment choices) turn out to be gambles rapidly losing steam.
The agile of mind, the conservative at heart, are the leaders and managers, the ones who stay ahead of the challenges on the horizon. When they do not, they make others pay a heavy price, which would be the customers with deposits beyond a certain limit (US$250,000) in banks that go under, and which are covered. In other words, those in charge position themselves to sidestep catastrophe when they read the situation right because they are open to listening. Banking crises are not unheard of developments, and many lessons have been learned from them, or should have been. Yet, the same leadership failures, executive recklessness, and managerial betting seem to keep repeating themselves.
The concern is that failed leadership does not result in the blowing up of themselves alone, in the rare instances that they were so negligent that they actually feel the pinch of their actions. Others who are unconscious to their looming disaster are the ones feeling the blows that they cannot bear. When banks fail and fall, it is the depositors, the men, women, and their families that make up the customer base, who pay. It is noteworthy that collapsed Silicon Valley Bank still paid out its 2022 bonuses to employees hours before its doors closed for good. Meanwhile, the crowds of frantic customers came pounding on the doors to withdraw their savings which were now out of reach.
There is one truth, one reality that is always constant: it is the public that is hurt, the ordinary citizens, and the faces in the crowd that form the masses. These are the people left to scramble for continuity, and how to make do, when all the expert analyses are over, when all the challenges and clashes are done about who was wrong, who was not up to the job. Those in charge and those close to them are well protected, would have taken care of themselves, while they rolled the dice with the confidence, trust, and hope placed in their hands.
It could be anything that is handled poorly that leads to calamity when things fall apart, go downward. It could be any commodity, including oil which is well known for its ups and downs. Or any set of governance policies that run into headwinds and fail due to lack of foresight, and the discipline to pause from the reckless barreling ahead, like if there is no tomorrow. The customers of Silicon Valley Bank and Signature Bank have some deposit insurance. Guyanese have nothing.
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