Silicon Valley Bank collapse: The danger can come from anywhere

Sustainability & Regulation
23/03/2023 Interview
profile picture of Pierre Gruson

Pierre Gruson

KEDGE Business School

Senior Professor in Market Finance

After the shock caused by the Silicon Valley Bank bankruptcy, there are great fears of aftershocks in the United States but also in the rest of the world. What can the FED do to prevent the risks? Are European banks safe? We asked Pierre Gruson for his opinion.

Should we expect an intervention from the FED?

Prior to the Silicon Valley Bank liquidity crisis, the Fed Open Market Committee (FOMC) announced a 0.50% increase in the Fed Fund for its March 22 meeting. 

Since then, the consensus of analysts published by Bloomberg anticipates an increase reduced by half to 0.25%. 

Not to increase is to recognize the seriousness of the crisis. To stay the same, as if nothing had happened, is to maintain the stress on the markets and increase the vulnerability of certain institutions. 

In recent months, the Fed has undertaken a significant reduction in the size of its balance sheet. Less refinancing was granted to financial institutions. This was a logical accompaniment to successive increases in primary rates. 

All of these efforts have been undone by the recent crisis.

Subscribe to keep reading

Try the 30-day free content subscription and get full access

Related news & insights

SME Banking
05/06/2023 Article

Financial services for the gig economy: Catering to the unique needs of independent workers

A recent Qorus report discusses the rise of the gig economy and its impact on the future of work and...

Digital Reinvention
31/05/2023 Interview

Fibabanka reinvents consumer finance by taking the bank where the customers are

In Turkey, Fibabanka created a stir with the launch of its BNPL Alışgidiş solution and the merchant ecosystem that accompanies...

Digital Reinvention
30/05/2023 Interview

City Savings Bank: Digital transformation as a tool to provide the best customer service

Manuel G. Santiago, Jr. is the President of City Savings Bank, a major thrift bank in the Philippines. He plays...

Digital Reinvention
29/05/2023 News

CBA announces new reimagined banking services

Commonwealth Bank has announced a series of innovations and technological advances designed to strengthen and deepen the customer experience as...

SME Banking
28/05/2023 News

CaixaBank launched a contactless payments app

CaixaBank has created an app that enables contactless payments of any amount to be managed quickly and easily from Android...

Open Finance
28/05/2023 News

Airwallex and TrueLayer partner to enhance payments infrastructure

Airwallex, the leading global payments and financial platform for modern businesses, announced its partnership with TrueLayer, the payments network powered...

SME Banking
26/05/2023 News

ASB offers discounted lending to support businesses’ social and environmental sustainability efforts

ASB is helping businesses on their sustainability journey with its new Business Sustainability Loan, aimed at supporting positive social and...

Sustainability & Regulation
25/05/2023 News

Crypto-assets in Luxembourg: Persistence amidst headwinds

The Luxembourg House of Financial Technology (LHoFT), together with PwC Luxembourg and with the active support of the Association of...