PROVIDENCE, R.I. (WPRI) — Rhode Island’s pension fund is poised to lose nearly $2.5 million following the collapse of two banks over the weekend.
Silicon Valley Bank failed on Friday followed by the collapse of New York-based Signature Bank on Sunday. Federal regulators took the dramatic step of setting up an emergency lending program to protect depositors from losing their money, but that does not safeguard investors who own stocks in those banks.
The Employee Retirement System of Rhode Island — the state-run investment plan that funds pensions for thousands of retired state and municipal workers — had just over $2.6 million invested in Silicon Valley, Signature, and two other banks that are in financial peril: First Republic and Silvergate Capital.
Michelle Moreno-Silva, a spokesperson for General Treasurer James Diossa, said those assets are now valued at just $185,535.
“ERSRI has had exposure to most of these assets for number of years as part of the Russell 3000 index in the U.S. public equity area,” Moreno-Silva said in an email. “We’re assuming that there is little value to the assets with the exception of First Republic which is still trading.”
The loss represents a very small percentage of the overall pension fund, which is valued at more than $10.3 billion.
Federal regulators announced depositors would have access to their money at Silicon Valley and Signature banks on Monday through the emergency fund. President Biden said over the weekend that “no losses will be borne by the taxpayers,” but rather the money comes from a fund that is financed by fees paid by banks.
The stock market has also reacted negatively to the developments when trading opened on Monday.