For the last couple of weeks now, the world has felt the strong pangs of a potential financial crisis. Over the last year, the US central bank has seen the fastest interest rate increase since the 1980s in an effort to curb inflation. These interest rate increases, along with the recent collapse of two major US banks, have people rightfully concerned about what’s ahead.
Silicon Valley Bank, Signature Bank, and the global stage
Both Silicon Valley Bank (SVB) and Signature Bank collapsed seemingly overnight – the second and third largest banking failures in US history. Silicon Valley Bank was a major lender in the tech industry, both domestically and internationally. Due to the collapse of SVB, anxious customers withdrew over $10 billion in deposits from Signature Bank just two days later, leading to its closure.
The ripples of this crisis hit the global stage, sparking Swiss authorities to oversee the takeover of Credit Suisse by its rival, USB – Switzerland’s largest bank. After years of uncertainty and growing distrust, the Swiss government altered laws to allow the takeover, in an effort to secure the country’s financial stability.
Alarms have been set off all across the globe for small and midsize banks, as many customers have withdrawn to secure their assets in larger, more stable banks. This has led to a global banking panic.
The good news
Despite the profound banking collapse of SVB and Signature, as well as the Credit Suisse takeover, experts are trying to reassure everyone that the banking system is still healthy and stable. None of the emergency loans that have been issued, internationally or domestically, have been taken out on secondary credit – typically the mark of a worst-case scenario.
The takeover of Credit Suisse has been seen as a likely possibility for years now, truly unrelated to the current crisis. For decades, the bank has been plagued by poor management, risky behavior and scandals, leading many investors to lose their trust long ago. Additionally, concerns were raised over questionable risk management practices at SVB before its collapse.
The state of banking might not be at its peak, but experts feel certain that there’s no need to panic. Concern is warranted though.
Alternative Solutions
The collapse of SVB and Signature illustrates the importance of having alternative solutions in place. As a small business or nonprofit, you might be affected by this looming financial crisis – you might feel tempted to be conservative with funds, pulling resources from marketing, graphic design, social media or similar communication departments. Here at Confidant, we want to offer you a reliable and affordable alternative solution. Confidant’s primary goal is to “Pursue your Trust to Tell your Story”, and we understand the importance of building a strategy around your nonprofits and small businesses with a limited budget, so we’re here to offer affordable, alternative solutions to fit your organization’s needs.
Our team of professionals has the experience, passion and discipline to help and come alongside in times of financial insecurity. You’ve got enough to worry about – digital marketing and fundraising should not be one of them.
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