The closure of Silicon Valley Bank and Signature Bank last weekend has many Alabamians worried if their financial institution could be next.
However, McKnight says it is important to understand what happened last weekend was a due to a bank run exacerbated by social media.
While some comparisons to other market events are being made, McKnight says it is very different, “History doesn’t repeat itself, but it rhymes. And that’s what’s happening right now, that rhyming convention of when we’re scared when we’re concerned about the future, how do we react?” “People react in a way that’s pretty consistent, which is, we’re going to sell whatever we can, and they’d have to cash. And unfortunately, that’s one of the worst decisions you can make. Because inevitably, it’s punitive, longer term, but it feels really good at the time,” stated McKnight
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