The impact of the Silicon Valley Bank (SVB) failure on the European Union (EU) is “limited,” but European Commission Commissioner Mairead McGuinness said the authorities need to “stay alert” to events as they unfold. McGuinness said that the impact of the collapse on the European Union was “limited”. Despite McGuinness’ reassuring remarks, share prices of major European banks plunged as much as 10% on the 15th.
Silicon Valley Bank’s impact on the EU is “limited”
The impact of the collapse of U.S. bank Silicon Valley Bank on the European Union has so far been limited, according to European Commissioner for Financial Services Mairead McGuinness. However, in his remarks to the EU Parliament on March 15Commissioner McGuinness saidthat EU authorities should “remain vigilant”
to events unfolding in international markets.
McGuinness also revealed that the European Commission (EC) is currently monitoring the U.S. banking situation in the hope of learning important lessons.
He told the EU Parliament that “the direct impact on the EU seems to be limited, but we should reflect on whether there are lessons to be learned in the EU banking sector.”
Credit Suisse Drags Down European Banking Stocks
Prior to McGuinness’ remarks on the impact of SVB’s failure on the EU, an unnamed European Commission spokesperson was quoted in a Reutersreportas saying that SVB has a small presence in the region and therefore has a limited impact. While the European Commission expects the EU to emerge from the current U.S. banking system crisis largely unscathed, McGuinness warned that rising inflation remains the main threat.
However, despite McGuinness’ reassuring remarks, the share prices of major European banks plunged 10% on the same day. Shares of Credit Suisse, Switzerland’s second-largest bank, hit an all-time low after the group’s main shareholder, the National Bank of Saudi Arabia, said it could no longer bail out the struggling bank. According to a
reportSaudi National Bank made the decision after a PwC audit found “material weaknesses” in Credit Suisse’s internal controls. At the time of this writing, Credit Suisse’s stock price has made a notable recovery on Thursday following news of the support from the Swiss National Bank.
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