Stock futures, bonds rally as U.S. acts to stabilise banks

U.S. stock futures rallied in Asian trade on Monday as authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank (SVB), though investors were also still favouring the safety of sovereign debt.

In a joint statement, the U.S. Treasury and Federal Reserve announced a range of measures to stabilise the banking system and said depositors at SVB (SIVB.O) would have access to their deposits on Monday.

The Fed said it would make additional funding available through a new Bank Term Funding Program, which would offer loans up to one year to depository institutions, backed by Treasuries and other assets these institutions hold.

The moves came as authorities took possession of New York-based Signature Bank (SBNY.O), the second bank failure in a matter of days.

Analysts noted that, importantly, the Fed would accept collateral at par rather than marking to market, allowing banks to borrow funds without having to sell assets at a loss.

“These are strong moves,” said Paul Ashworth, head of North American economics at Capital Economics.

This report’s information was first seen on REUTERS; to read more, click this link.