US bank comes to the rescue and agrees to buy all the loans and deposits of failed lender
A First Citizens Bank branch is shown in Dunwoody, Georgia, US. File photo: ELIJAH NOUVELAGE
First Citizens BancShares has bought all the loans and deposits of SVB and gave the Federal Deposit Insurance Corporation equity rights in its stock worth as much as $500m in return. Banking stocks in Europe were higher on Monday after a torrid previous session. Germany’s biggest lender, Deutsche Bank, which had slumped 8.5% on Friday alongside a sharp jump in the cost of insuring its bonds against the risk of default, rose 5.2%.The First Citizens deal for SVB sealed the first weekend in several weeks that did not bring news of fresh banking collapses, rescues or emergency help from authorities.
The sudden spike in tensions for banks has raised questions about whether major central banks will continue to pursue aggressive interest rate hikes to tamp down inflation, and whether tightened lending will hurt the global economy.
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