Theme of the week: concerns over the financial system

The fallout from the Silicon Valley Bank (SIVB) and Signature Bank (SBNY) failures has sparked concerns over the integrity of the entire U.S. financial system. Experts are warning the crisis could expose deep problems in the banking system that could threaten the economy. Former FDIC Chair Sheila Bair said on Yahoo Finance that there “may be more shoes to drop here” and that the federal government’s “bailout” will only serve to unsettle investors and bank customers.

Shark Tank Co-Host Kevin O’Leary said the failed banks “caused chaos in the banking system” and the government’s new policies will only hurt the banking sector going forward. The crisis has also increased speculation about the Fed’s next interest rate move. Economists are split on whether the Fed will continue to hike rates or pause monetary tightening in response to the current turmoil in the markets. However, Citi Economist Veronica Clark said it’s too early to tell the lasting impact from the crisis, but she says with a continued strong economy the Fed is likely to keep its rate tightening cycle going.

Key video moments

00:05 Sheila Bair Former FDIC Chair on risks

00:20 Kevin O’Leary on what could be next

00:52 Citi Economist Veronica Clark on the Fed