January 6, 2009

SHOULD YOU BE CONSIDERING BANK OR THRIFT HOLDING COMPANY STATUS?


The New and Unanticipated Dynamics of the Marketplace

With the implosion experienced in the global capital markets in 2008 and the resultant freezing of many traditional sources of both debt and equity financing among institutions searching for credit and liquidity, it has become increasingly apparent that, in the US and elsewhere, government-sponsored financial assistance has become the most significant source of new capital and funding.

Yet the constraints on these funds and the programs’ limitation, in many cases, to banks and thrifts pose an unavoidable quandary for many financial institutions that do not, at present, possess a banking or thrift charter.

At the same time, the financial services industry has come to understand that retail commercial bank deposits also afford more stable funding.

These two new factors have caused an unparalleled transformation within the financial services industry. There are now many reasons for entities to adopt commercial banking and savings institution status.

For our readers, we have prepared an overview of this new landscape. Please read it here.

To explore DLA Piper’s library of writing on the financial crisis, please click here.