No systemic risk from SVB failure, but watch out for areas of vulnerability
What happened to Silicon Valley Bank? Silicon Valley Bank (SVB), a commercial bank that specialises in serving start-ups in Silicon Valley, has been shut down by regulators.The bank relied on wholesale funding, was heavily concentrated on the tech industry, and had lower capital requirements and lower regulatory scrutiny than larger banks, all of which contributed […]
A global assessment of the implications of recent banking sector developments
How does the current turmoil in the banking sector affect your view of the economy and central bank actions? Due to tightening financial conditions, we expect a weaker US economic outlook, and a less aggressive Fed: a small increase in rates is still on the cards and then a pause. The tightening of monetary policy […]
European banking sector set to withstand Credit Suisse fragility
What is happening to Credit Suisse? The Credit Suisse turmoil appears to be driven by a crisis of confidence, with markets putting banks under scrutiny following the SVB failure. The failure of SVB and other regional banks in the US, which led to the turbulence now affecting Credit Suisse, can largely be attributed to the […]
Potential Opportunities in the US Banking Sector
Despite the failure of a handful of banks in the US and one in Europe, our view is that 2023 will not present a financial crisis near the magnitude of the Global Financial Crisis (GFC) in 2008. The three failed US banks, Silvergate, Silicon Valley and Signature, had unique business models that proved to be […]