Silicon Valley Bank collapse rocks financial markets
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Jeremy Hunt has spoken out on fears of a 2008-style financial crash amid growing turbulence in global markets. The Chancellor sought to quell fears, telling LBC’s Andrew Marr the UK has a “very well-regulated well capitalised system.”
When asked if he is “concerned that we are heading for 2008 moment”, Mr Hunt responded: “I’m really sorry, but there is a golden rule that finance ministers never comment on market movements for obvious reasons.
“So, what I will say is that last weekend talking about the past when we were dealing with the Silicon Valley Bank issue, the Governor of the Bank of England told me and said publicly many times that he had absolute confidence in the stability of the UK financial system.
“And I think we should recognise that we have a very well-regulated well capitalised system.”
Last Friday, Silicon Valley bank in the US collapsed, sending stocks falling in other small and medium-sized banks.
In a report on Thursday, Goldman Sachs increased its probability of the US economy entering a recession in the next 12 months by 10 percentage points to 35 percent due to stress on small banks.
But on the same day, Treasury Secretary Janet Yellen told the Senate Finance Committee that the US banking system remains sound.
She said Americans can feel confident that their deposits will be there when needed.
In remarks at a budget hearing, Ms Yellen said the Government had taken “decisive and forceful” actions to secure public confidence in the banking system.
And in a statement Sunday, President Joe Biden said: “The American people and American businesses can have confidence that their bank deposits will be there when they need them.”
In the UK, ripples from Silicon Valley Bank’s collapse shook some funds and investors.
Tom Britton, co-founder of venture capital fund SyndicateRoom, told the Daily Express earlier this week: “While our own portfolio is minimally exposed to SVB, the ripples will be felt across the UK tech ecosystem.
“The irony is that focus and good communication are drilled into startups from early on, but the bank built around startups seems to have failed on both accounts.”
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