• Banking crisis SVB, Signature, First Republic... The black (and bottomless) hole of America's median banking
  • Swiss absorption delivers Credit Suisse to UBS at balance price to avoid collapse in the midst of banking crisis

The global financial crisis threatens to create a 'balance sheet recession', i.e. a credit crunch that sinks growth. The first international organization to assess that cost in the 'real economy' of the banking crisis is the Inter-American Development Bank (IDB), which is holding its annual meeting in Panama.

According to the agency's chief economist, Eric Parrado, if a 'financial shock' occurs, Latin America and the Caribbean run the risk of registering zero growth in 2023. The IDB's analysis is based on a pessimistic basis for the region, since the entity predicts that, even if the crisis stops, growth will barely reach 1% this year, a very low figure that indicates the persistence of structural problems in Latin America.

Meanwhile, the markets reopen today with an eye on the possible risk of the banks that have relations with Credit Suisse, which this Sunday was bought - with a massive intervention of the State - by its Swiss rival UBS. The second element of concern remains medium-sized U.S. banks. Washington managed last night (early today in Spain) to find a buyer for one of the banks that has intervened since the beginning of the crisis.

The New York-based Signature Bank will be acquired by New York Community Bank, and its 40 branches will come under the Flagstar brand, one of those employed by that entity. New York Community Bank will pay 2,700 million dollars (2,500 million euros) for Signature, with which it will take control, in addition to all the branches of that bank, of 38,400 million dollars (36,000 million euros in assets).

That's just a small portion of Signature's assets. Around 60,000 million dollars more will be in the hands of the State, which hopes to sell them, presumably at a good price, in the future. Signature was the second bank to collapse in this crisis, after California's Silicon Valley Bank (SVB), which is twice as large and for which Washington has not yet found a buyer.

Signature's collapse was mainly due to its investments in cryptocurrencies – whose value plummeted in 2022 – and the massive withdrawal of deposits from the entity after SVB's intervention. Signature had a large amount of deposits that exceeded the 250,000 dollars (234,000 euros) that the State guarantees in the US.

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