The Silicon Valley Bank (SVB) collapse has had a “limited impact” in the European Union, but policymakers must still “remain alert” to events as they unfold, said European Commissioner Mairead McGuinness. Despite McGuinness’s reassuring comments, shares of Europe’s biggest banks plunged as much as 10% on March 15.
Silicon Valley Bank’s ‘limited’ impact on the EU
According to the European financial services commissioner, Mairead McGuinness, the collapse of US bank Silicon Valley Bank has so far had a limited impact on the European Union (EU). However, in her March 15 remarks to the EU Parliament, McGuinness saying The region’s authorities must “remain alert” to events taking place in international markets.
McGuinness also revealed that the European Commission (EC) is currently monitoring the banking situation in the United States and expects to learn important lessons.
“The direct impact on the European Union seems to be limited, but we should reflect on whether there are lessons to be learned for the banking sector in the European Union,” the commissioner told the EU parliament.
Credit Suisse drags European bank shares lower
Prior to McGuinness’s comments on the impact of SVB’s collapse on the EU, an anonymous spokesman for the European Commission was quoted in a Reuters report stating that the bank had an insignificant presence in the region, hence the limited impact. While the commission hopes the EU will emerge largely unscathed from the latest crisis in the US banking system, McGuinness nevertheless warned that rising inflation remains a key threat.
Yet despite McGuinness’s reassuring comments, shares of Europe’s biggest banks plunged as much as 10% on the same day. Shares were dragged down by Credit Suisse, Switzerland’s second-biggest bank, whose shares hit a record low after the group’s main shareholder, the Saudi National Bank, said it could no longer bail out the embattled bank.
according to a reportThe Saudi National Bank’s decision came after a PwC audit revealed “material weaknesses” in Credit Suisse’s internal controls. At time of writing, Credit Suisse shares have seen a marked recovery on Thursday, following news of assistance from the Swiss National Bank.
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