Brussels: European Commissioner Mairead McGuinness said the collapse of Silicon Valley Bank could have an impact on the European Union, so the EU “must remain alert” to the dramatic events unfolding in international markets.
“We are keeping a close eye on the situation in the United States,” McGuinness told the European Parliament on Wednesday. “While the direct impact on the EU may be limited, it serves as a lesson for the EU’s banking sector,” she explained.
McGuinness also warned that high inflation in Europe could precipitate such a situation, causing central banks around the world to raise interest rates at an unprecedented pace.
“High inflation and rising interest rates will present various challenges to the economy,” McGuinness said. As a result, Europe should exercise caution.
The US commissioner also stated that a company like Silicon Valley Bank, with assets of more than $200 billion by the end of 2022, would be considered a “large bank” by EU standards.
The Russian invasion of Ukraine, the energy crisis, soaring inflation, and high interest rates have all had a significant impact on the economy.
As a result, the banking sector must implement effective safeguards to protect investor confidence, financial stability, and taxpayers.
After the collapse of Silicon Valley Bank, New York-based Signature Bank also collapsed. It is reported to be the third-largest collapse in US banking history. The Federal Deposit Insurance Corporation (FDIC) has set up a bridge bank to manage Signature Bank customers’ accounts.
To some extent, the collapse of Silicon Valley Bank and the subsequent panic affected Signature Bank. In a joint statement, the US Treasury Department and other bank authorities stated that taxpayers would incur no losses and that investors in Signature Bank and Silicon Valley Bank would be fully compensated.
Irish Samachar English News
Kindly click the link below to join WhatsApp group chat to get important news and breaking news from Irish Samachar.