Source: AdobeStock.
Although we are still feeling the aftershocks caused by the sudden collapse of Silicon Valley Bank in California and Signature Bank in New York, there are already lessons to learn and questions to ask as we deal with another increasingly common financial surprise.
1. Borrowing Facility Extended to Credit Unions
On Sunday evening, the Federal Reserve and the FDIC announced the creation of a new program that will allow both banks and credit unions to borrow against the par value of their investments for a period of up to one year. While the NCUA has been noticeably quiet, it's important to know that credit unions are also eligible to participate in this program, which is apparently designed to enable financial institutions to sell collateral at a discount to meet a sudden run on deposits. Hopefully, few if any credit unions will need this help.
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