Bankruptcy of the SVB: “French banks are not exposed”, assures the Banque de France
To reassure. This is the watchword this Monday, March 13 after four days of madness across the Atlantic which will have seen the bankruptcy of two banks, the Signature Bank and, above all, the Silicon Valley Bank, the 16th American bank which worked with half of the tech companies. In less than forty-eight hours, this establishment had to go out of business, victim of a “bank run”, an influx of customers wanting to withdraw their money and an inability to deal with it.
“French banks are not exposed to the Silicon Valley Bank file (SVB) “, informs us the Bank of France. A speech in line with the remarks made a little earlier by Bruno Le Maire on France Info. “I do not see any risk of contagion, so there is no specific alert,” said the Minister of Economy and Finance. Before specifying: “What happened in the United States is very singular, it is a bank which was very exposed to the tech sector, which had difficulties linked to the increase in interest rates. interest “.
This increase made the bonds that SVB had in its portfolio lose value and that it had to settle at a loss to ensure the massive withdrawals requested by its customers. Conversely, Bruno Le Maire boasts of a solid French banking system with “a high cash ratio” and “diversified business sectors”.
Is all risk of contagion ruled out? In any case, the American authorities worked all weekend to contain the fire as much as possible. While deposits were only guaranteed up to $250,000, Treasury Secretary Janet Yellen, the Federal Reserve (Fed) and the Deposit Guarantee Agency (FDIC) announced that they were going to guarantee the withdrawal of all the deposits of the two banks. The Fed – the American central bank – has even agreed to lend the necessary funds to other banks that need them to honor their clients’ withdrawal requests.
Falling global stock markets
In Europe, while there is no French branch, the UK branch of SVB was sold to British banking giant HSBC for a symbolic £1. “HSBC is Europe’s biggest bank and SVB UK customers should feel reassured by its strength,” said UK Finance Minister Jeremy Hunt.
In Germany, “the critical situation of the German branch of the SVB does not constitute a threat to financial stability”, notes for its part BaFin, the German banking supervisor, which has nevertheless suspended the bank’s activities for the time being. that the situation becomes clearer.
If the banking regulators are firing on all cylinders to reassure, the markets are punishing the situation harshly. This Monday noon, all world stock markets plummeted, with the CAC 40, for example, losing some 2.5%. Bank stocks were heckled with BNP Paribas, Société Générale and Axa, which lost more than 5% at the end of the morning. Waiting for the opening of the American markets which could give a signal of recovery or widening of the losses.
