Prof. Paul Vaaler Interviewed on WCCO and KARE11 on Regional Bank Collapses
Professor Paul Vaaler was interviewed on WCCO and KARE11 on the recent collapses of Silicon Valley and Signature Banks. The commonality between the two, Professor Vaaler explained, was that they were "both aggressive lenders in the tech sector." With a large percentage of their investments during the pandemic era being low-interest treasuries, the banks were caught in a reverse squeeze due to nationally rising interest rates. Compounding on top of that fact, the speciality area for each bank- technology investment has become an increasingly volatile market over the past year. When questioned with a similar collapse could happen to a regional bank in Minnesota, Professor Vaaler explained, "this is a diversified economy and a regional bank serving it would also have a diversified base of loans and other types of transactions that you might not see in other parts of the country."