Behind the scenes, criticism is heard. European financial regulators are analyzing the position of their North American counterparts in the face of the collapse of the Silicon Valley bank, the Financial Times reports.
Secretly behind the scenes, European financial regulators have already criticized the position of their North American counterparts, given the collapse of SVB Financial Group, which owns Silicon Valley Bank (SVB), Presented by the Financial Times (foot).
The British newspaper quoted a senior eurozone official who considered the US authorities’ decision – to cover all deposits held in SVB – “total and utter incompetence”, especially after more than a decade of meetings with the US. It was in light of the constitution of the rules that advocated the end of bailouts.
In the UK, a former policymaker who helped legislate bank decision standards described US authorities’ treatment of SVB as a “disaster”.
European supervisors are particularly alarmed that the US has broken the pattern of locking in only the first $250,000 in deposits, using the argument that this is an “exception that takes into account systemic risk”, despite the fact that SVB is only one regional bank.
“This is the North American version of the Banks of Venice,” French economist Nicolas Ferron explained in statements to the British daily, recalling Washington’s criticism of the way Europe dealt with the collapse of the Italian Monte dei Paschi bank.
The specialist also believes in the organization of the “think tank” of the Washington Peterson Institute that in terms of financial stability, the United States tried to “kill a fly with a sledgehammer.”
SVB closed its doors last week after a liquidity crisis. In a statement, the US federal agency responsible for deposits, the FDIC, announced the formation of a separate fund into which deposits held by Silicon Valley Bank will be transferred. The agency transferred this money to its owners.
