Janet Yellen prepares to offer assistance to regional banks throughout the United States.

Sunday March 12, Rémy Raisner was at the gym in New York when his phone started ringing. It was his bank, the Signature Bank, which had just been placed in receivership by the American federal authorities. “A big surprise”confides this real estate investor, who owns about forty buildings in Brooklyn.

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“Signature was the real estate bank in New York. She had a reputation for impeccable service, very prestigious clients, and we were very happy with that.”continues this 41-year-old French entrepreneur, who got into the business by buying the mortgages of a bank that went bankrupt during the great recession of 2008. With dozens of accounts, loans and deposits, c was the disaster.

However, Mr. Raisner did not panic for very long: shortly afterwards, at the beginning of the evening, the Federal Reserve (Fed, American central bank) and the government announced that all the deposits of the bank, which had 110 billion dollars ( 102 billion euros) of assets and 89 billion of deposits, would be guaranteed, like those of the Silicon Valley Bank (SVB), which fell into disarray two days earlier.

The Signature Bank, victim of the flight of depositors and the loss of confidence of the supervisory authorities in its management, has since been sold to another institution, the Flagstar Bank, and Mr. Raisner does not intend to change it. “Today is as close as possible to business as usual”. We almost have a stronger guarantee than the other regional banks”he notes.

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“Lifeline Credit”

Little known outside the United States, American regional banks play a decisive role in financing the economy. Just as Californian start-ups all went to the SVB to open an account – this bank knowing how to manage businesses without turnover – Signature is effectively the real estate bank. There are tiny ones, like the Buffalo Federal Bank for ranchers and miners in Wyoming or the Bar Harbor Bank, which serves lobster fishermen in Maine, among others.

In total, note the Financial Times, there are more than 4,000 regional banks across the Atlantic, most of them unlisted and with assets of less than a billion dollars. Their political role is not negligible. They often act as government relays to distribute credits and federal aid. “Dropping the regional banks would have created too much ‘disruption’. I don’t think there really was a choice.”continues Rémy Raisner.

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