SESSION RECAPS

What caused the first ‘Twitter-fueled bank run’?

Slides

Here’s a recap of our April 2023 Onyx session where Jermaine Fletcher, Vice President of Business Banking at First Horizon, shared some insight on what led to “the first Twitter-fueled bank run” and his advice on what to do going forward. We’ll start by discussing the most important part—how to protect ourselves going forward. 

The first part of Jermaine’s advice will sound familiar: Start with shoring up your everyday money management practices. Focus on building a strong financial foundation by:

  1. Spending less than you make. Review your expenses regularly so you can reduce costs.
  2. Saving as much as you can. Investing sooner rather than later and taking advantage of the power of compounding interest over the long term
  3. Diversifying your investments. Reduce your risk by limiting overexposure to any one particular sector.

Next up: Tools we can leverage to protect our assets during an economic downturn. 

The first tool is Federal Deposit Insurance Corporation (FDIC) Insurance, which most people are familiar with. Depositors are protected for up to $250,000 at an FDIC-insured bank. Find more details about the types of deposits covered in the image below.

Next, Jermaine shared three additional tools people may be unaware of: Securities Investor Protection Corporation (SIPC) Insurance, Insured Cash Sweep (ICS), and Certificate of Deposit Account Registry Service (CDARS).

  • SIPC: This type of insurance protects brokerage accounts. SIPC covers assets up to $500,000—which includes a $250,000 limit for cash.
  • Insured Cash Sweep (ICS) and CDARS: When you deposit assets in banks with ICS or CDARS, they can use these services to divide it into amounts under the standard FDIC insurance maximum of $250,000 and spread it across multiple banks on your behalf–which means they do all that legwork for you.

We hope these tips were helpful. If you’d like to learn more about what caused the banking crisis in the first place, then check out the recording or slides from our April 16th session or the podcast linked below for additional insight. 

Brookings Institution PodcastFinally, Jermaine had one last pro tip for our business owners: Be mindful of the tax strategy you decide to use. Minimizing your tax burden is a totally understandable approach. However, you may have a hard time getting a business loan if your tax returns show years of continual losses. If you would like to follow up with Jermaine feel free to email him at jfletcher@firsthorizon.com.

Jermaine Fletcher 

Senior Vice President, Commercial Banking Team Lead

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