Mattress Money ?

(Mattress Money ?)

Whenever one convenes a game of Monopoly., there is usually the player that acts as the "banker." He or she would be the one to disburse cash to the other players in the proper amounts. The game is played, properties are bought or sold, money changes hands and when one gets a "monopoly" or the one with the most assets, cash and property, wins the game.

Now, Monopoly is a board game. However, there are real banks whose combined assets are only worth Monopoly money, worthless in other words. Banks in general can be subject to market fluctuations and when a rumor that this bank or that might be in difficulty, customers who might have deposits at that institution, could move to withdraw those funds and move them somewhere safe. Like the mattress.

A bank failure has been in the news in recent days. The Silicon Valley Bank, the one that operates in Silicon Valley and as such, would be "tech" dependent. The recent rise in interest rates has not been good for the technology sector and the banking institution that had bankrolled the area. Tech weakness translated into uncertainty at SVB and that uncertainty prompted its depositors to start withdrawing their money. Which prompted FDIC to secure the remaining accounts and closing the Silicon Valley Bank.

SVB's failure is the worst since the so-called Great Recession and the financial collapse that followed. Leahman, Bear Stearns, Washington Mutual have all been casualties. Now, the banking industry is the most regulated around and sometimes it is seen to excess. People want to make money and a laissez faire approach might not be practical, the other extreme can be just as problematic.