European Banks Remain Stable Despite Silicon Valley Bank’s Closure
The recent failure of Silicon Valley Bank in the United States has caused concerns amongst investors about the stability of European banks, but authorities are reassuring the public that there is little risk of contagion. In fact, the EU Commissioner for the Economy, Paolo Gentiloni, has stated that European institutions are in a better position now than during the 2008 banking crisis.
Gentiloni has highlighted that all European banks, including the largest ones, are applying the prudential rule of Basel, which means that direct contagion is unlikely. Although there is a possibility of an indirect impact, Gentiloni does not believe that it is a significant risk at the moment.
Meanwhile, the White House has also intervened to dampen fears of contagion, with Joe Biden promising to strengthen regulations and protect taxpayers. Biden has stated that he will ask Congress and bank regulators to tighten the rules for banks to prevent this type of bank failure from happening again and to protect America’s jobs and small businesses.
Despite these reassurances, the markets on both sides of the Atlantic remain jittery, particularly after the failure of another US bank over the weekend. However, authorities are closely monitoring developments and have assured the public that the crisis has been contained for now.
In conclusion, while the closure of Silicon Valley Bank has raised concerns about the stability of European banks, authorities are optimistic that there is little risk of contagion due to the application of prudential rules. Additionally, the White House has promised to protect taxpayers and small businesses by strengthening regulations. While the situation remains closely monitored, there is optimism that the crisis has been contained.