Recent US banking crisis have generated more concerns than answers. Wall Street was on edge after two American banks collapsed and Credit Suisse lost investor trust, causing huge market fluctuations.

People fear their bank may collapse, as indicated by increasing online searches for that issue following the Silicon Valley Bank collapse last week.

Former Treasury Secretary Lawrence Summers reassured the public that, despite the dire news reports, now is not the moment for Americans to worry, per a CNN interview.

"I don't think this is a time for panic or alarm," Summers said, noting that, in contrast to the dire financial situation in 2008, consumers now have less cause for concern about their access to funds because the situation is "absolutely" not the same.

Because so few depositors exceed the $250,000 insurance cap, experts believe there is no need for consumers to be concerned about money held in banks that are insured by the Federal Deposit Insurance Corporation.

Moreover, the government went to unusual lengths with Signature and SVB to insure deposits above that cap.

According to Kendall Capital President and CEO Clark Kendall, the government's actions established a precedent for future bank collapses, per USA Today. He believes that the FDIC now will take action to protect depositors.

However, it is more challenging to buy a property with all the fear in the market, especially if government authorities like the Federal Reserve tighten up on banks after SVB collapse.

Most economists think that the Federal Reserve will keep its unprecedented policy of raising interest rates to fight inflation.

The former JPMorgan trader Vivian Tu predicted that interest rates will continue to climb based on what was mentioned by the Federal Reserve.

In addition, she noted that many people "are feeling very concerned" whether it's wise to deposit their down payment savings in a bank, after the Silicon Valley Bank collapse.

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Dollar Rose in Safe-Haven

Meanwhile, as Credit Suisse's shares fell on Wednesday due to "weaknesses" in its financial reporting, safe-haven buying boosted the US dollar amid investor concerns about a worldwide banking crisis.

Once Credit Suisse's largest investor said it could not grow its investment, European currencies dropped strongly against the dollar due to the news. The investor cited regulatory problems related to the size of its holding, according to CNBC.

The Swiss bank crisis caused a 6.12% drop in the European banking index, the biggest one-day drop in more than a year, and a significant drop in bond yields in both Europe and the United States as investors questioned the ability of the Federal Reserve and other central banks to continue hiking interest rates to combat inflation.

Possible Global Domino Effect

Bipan Rai, chief of FX strategy at CIBC Capital Markets in North America, expressed fear that Credit Suisse's issues might spread to other banks across the world.

The expert said that to solve problems in the real economy, central banks must tighten monetary policy; though, this has financial repercussions, which puts them in a difficult position.

With the euro dropping 1.4% to $1.058, the dollar index, which tracks the value of the dollar against a basket of six other currencies, increased by 1.1%. Dollar/CHF increased by 0.85%, while Euros decreased by 0.75% to $1.2067. The value of the Japanese yen against the dollar rose by 0.75%, to 132.22.

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