Wednesday, March 29, 2023

The Eurogroup will analyze the consequences of the bankruptcy of SVB

The Silicon Valley Bank (SVB) has dropped out of the list of Eurozone economy and economy ministers, at a meeting held this Monday by the Eurogroup. European ministers will discuss its possible consequences for the monetary system of the common currency. This was stated by the president of the Eurogroup, Paschal Donohoe, in a previous press release. “Finance ministers will also be updated on the developments made as a result of the changes with Silicon Valley Bank, what this means for eurozone banks and the decisions of our regulator and the Commission,” he said. Irish minister

The European Commission sent a reassuring message and stated that it was already “monitoring the case” and noted the “quick and decisive decision of the US authorities”. Community Financial Services spokesman Daniel Ferrie wanted to cool the concern that is creeping up like the oil spill beyond the stock market. “In the European Union there is a very limited presence of the Silicon Valley Bank and we are communicating with the authorities. The relevant national authorities,” Ferrie said.

At the political level, the first reactions have already taken place, the French minister of economy and economy, Bruno Le Maire, has stated that he sees no risk of contagion in the French banking system, which is solid, diversified and “very important”. rigid “government. Le Maire insisted in an interview on the France Info station that “the French situation is completely different”, and pointed out that the collapse of SVB “is something very specific” that affected a special bank in the technology sector.

Emergency measures in Germany and Britain

The Kingdom of Great Britain built a more aggressive fire wall, which was in the region where SVB had its subsidiaries. Specifically, Silicon Valley Bank UK (SVBUK) has a new owner as of Sunday: HSBC, Europe’s largest bank. All this at the symbolic price of one pound. In a statement on Sunday to the Hong Kong Stock Exchange, where HSBC is listed, the subsidiary’s assets are valued at around 1,400 million pounds (1,581 million euros).

On its part, the Federal Financial Supervisory Authority of Germany imposed this Monday a moratorium on the Silicon Valley Bank of Germany, the name under which the business operated in the country, at risk of meeting obligations with creditors. In this sense, he imposed a moratorium on it and ordered the closure of customers.

Moreover, from the German director, it was emphasized that the troubled entity’s branch “does not have systemic importance” and they stated that the entity in Germany “does not represent a threat to economic stability”. For this purpose, they have developed a proposal that “does not have the consequences of deposit insurance in Germany” and they justify this by the fact that the entity, which has been operating in Germany since May 2018, is in the business of loans and not in deposits. .

Nation World News Desk
Nation World News Desk
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