The collapse of Silicon Valley Bank (SVB) has had a “limited impact” on the European Union, but authorities should still “remain vigilant” about developments, European Commissioner Mairead McGuinness has said. Despite the reassuring comments from McGuinness, shares of Europe’s biggest banks still fell by up to 10% on 15 March.
Silicon Valley Bank’s ‘limited’ EU influence
The collapse of US bank Silicon Valley Bank has so far had limited impact on the European Union (EU), according to Mairead McGuinness, the European Commissioner for Financial Services. However, in 15 March remarks before the EU Parliament, McGuinness Said The authorities in the region should “stay alert” to the developments unfolding in the international markets.
McGuinness also revealed that the European Commission (EC) is currently monitoring the banking situation in the United States and hopes to learn important lessons.
“The direct impact on the EU appears to be limited but we should consider whether lessons can be learned for the EU banking sector,” the commissioner told the EU Parliament.
Credit Suisse drags European banking stocks
Prior to McGuinness’s comment on the impact of the collapse of the SVB on the European Union, an unnamed spokesperson for the European Commission was quoted in Reuters. reports Having said that the bank has negligible presence in the region, hence limited impact. While the Commission expects the EU to recover substantially from the latest US banking system crisis, McGuinness however warned that rising inflation still remains a significant risk.
However, despite McGuinness’ reassuring comments, shares in Europe’s biggest banks still fell by up to 10% on the same day. Shares were pulled down by Credit Suisse, Switzerland’s second-largest bank, whose shares hit an all-time low after the group’s main shareholder, the Saudi National Bank, said it would no longer bail out the beleaguered entity. Can give
according to a reportsThe Saudi National Bank’s decision was taken after a PwC audit found “material weaknesses” in Credit Suisse’s internal controls. At the time of writing, Credit Suisse shares have seen a significant correction on Thursday following news of aid from the Swiss National Bank.
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