(Washington) Americans can “have confidence” in a “solid” banking system, Joe Biden assured Monday, while European officials seek to reassure on the risk of contagion to global finance from the collapse of the bank Californian Silicon Valley Bank (SVB).
“We will not stop there,” assured the president, Monday morning, from the White House, seeking to fuel the most precious resource in the markets: confidence, the only bulwark against a large-scale contagion of trouble. of Silicon Valley Bank (SVB).
The American authorities placed under supervision Friday this establishment close to the technological circles. It was put up for auction with the aim of finding a buyer as soon as possible.
They also intervened in haste in the face of the bankruptcy of two smaller establishments, Signature Bank and Silvergate Bank, known for its privileged links with the cryptocurrency community.
PHOTO ED JONES, FRANCE-PRESSE AGENCY
A branch of Signature Bank in New York
Joe Biden also said he would ask Congress to legislate to “strengthen” banking regulation, toughened after the Lehman Brothers debacle in 2008 but then lightened by his predecessor Donald Trump.
He promised that American taxpayers would not be taxed, but investors and shareholders would not be “protected” from the losses suffered.
To reassure
On the other side of the Atlantic, European politicians are also trying to provide reassurance about the risk of contagion to the entire banking sector.
“There is no direct contagion and the possibility of an indirect impact is something that we must monitor, but for the moment we do not see a significant risk”, declared in Brussels the European commissioner for the. ‘Economy, Paolo Gentiloni, before a meeting of Eurozone Finance Ministers.
A spokesperson for the Banque de France told AFP that French banks ” [n’étaient] not exposed ”to SVB, while, earlier in the day, the French Minister of the Economy Bruno Le Maire had ruled out any risk of contagion.
“Calm down, calm down, and look at the reality! “, he launched to investors, believing that” the reality is that the French banking system is not exposed to the SVB. There are no links between the different situations” in the United States and in Europe.
In Germany, banking supervisor Bafin assured Monday that the bankruptcy of SVB did not constitute “a threat to the financial stability” of the country.
However, these announcements did not prevent Wall Street from opening lower on Monday morning, before recovering in the morning.
But several regional banks were collapsing. The Californian First Republic fell 60.49% at the end of the morning, losing more than three quarters of its market capitalization since Wednesday.
The star indices of the main European markets also suffered, with declines ranging from 2 to 3% or even more for the main indices, and banking stocks suffered sharp declines.
Guaranteed withdrawals
On Sunday, the US authorities announced that they would guarantee the withdrawal of all deposits from SVB and allow access to all deposits from Signature Bank.
PHOTO NOAH BERGER, AGENCE FRANCE-PRESSE
A branch of Silicon Valley Bank in Santa Clara, California
In addition, the Federal Reserve — the Fed, the American central bank — has agreed to lend the necessary funds to other banks that need them to honor their clients’ withdrawal requests.
London, for its part, announced that the British branch of SVB had been sold to the British banking giant HSBC, for a symbolic pound.
“SVB UK customers will be able to access their deposits and banking services as normal from today”, assures the British Treasury.
The authorities want at all costs to avoid a panic in the markets on Monday and mass withdrawals of bank customers, a “bank run” with potentially devastating effects.
The SVB debacle illustrates the disruption of the entire US banking system in the face of Fed monetary tightening.
Interest rate hikes in the United States have prompted customers to put their money into better-paying financial products than current accounts, drying up a crucial source for the cash-hungry new technology sector.
The race against time this weekend recalls September 13 and 14, 2008. The American authorities had failed to find a buyer for Lehman Brothers and refused to intervene, pushing the bank to file for bankruptcy, with dramatic consequences for the sector. finance and the global economy as a whole.
