
European Commissioner Mairead McGuinness has stated that the impact of Silicon Valley Bank’s (SVB) collapse on the European Union has been limited, although authorities must remain vigilant. Despite her remarks, stocks of Europe’s largest banks still fell as much as 10% on March 15.
Limited EU Impact of SVB Collapse
Mairead McGuinness, the European Commissioner for financial services, has announced that the collapse of the U.S. bank Silicon Valley Bank has thus far had minimal impact on the European Union (EU). McGuinness shared her remarks before the EU parliament on March 15, and urged the region’s authorities to “stay alert” as the situation unfolded.
McGuinness further noted that the European Commission (EC) is monitoring the banking system of the United States, hoping to learn important lessons from the incident. She said:
“The direct effect on the European Union appears to be limited, but we should consider whether there are lessons to be learned for the European Union’s banking sector.”
Credit Suisse Drags Down Banking Stocks
An unnamed spokesperson for the European Commission had previously been quoted in a Reuters report, claiming that SVB’s presence in the EU was insignificant, thus the limited impact. The commission anticipates that the EU will be largely unscathed from the current banking system crisis in the US, yet McGuinness warned that rising inflation remains a key threat.
In spite of the commissioner’s assurances, stocks of Europe’s foremost banks still plunged by as much as 10% on the same day. The slump was mainly due to Credit Suisse, Switzerland’s second-largest bank, whose shares dropped to an all-time low after the group’s main shareholder, the Saudi National Bank, said it could no longer bail out the struggling entity. The Saudi National Bank’s decision followed the results of a PwC audit, which disclosed “material weaknesses” in Credit Suisse’s internal control. As of writing, Credit Suisse shares have experienced a marked recovery on Thursday, after news of assistance from the Swiss National Bank.
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