Chancellor Olaf Scholz said Germans shouldn’t be worried about their savings following the collapse of Silicon Valley Bank as regulators improved oversight since the last global financial crisis.
(Bloomberg) — Chancellor Olaf Scholz said Germans shouldn’t be worried about their savings following the collapse of Silicon Valley Bank as regulators improved oversight since the last global financial crisis.
“We have made considerable progress compared to the situation during the financial crisis of 2008, 2009 — we have learned our lessons, so to speak,” Scholz told reporters in Berlin when asked if Germans could be assured that their deposits are safe.
European and US authorities implemented “significant reforms” of the supervisory institutions, but also for the management of banks in the past years, according to the German chancellor.
“You can see from the very clear and sharp reaction of the American, the British, the European but also the German authorities that this situation is being monitored very closely, that action is being taken quickly and swiftly — and that is the best thing to do when you want to protect savings,” he said. “So that’s why there is really no reason for anyone in Germany to be worried.”
The collapse of SVB has sent shockwaves through financial markets and officials around the world have been eager to show their resolve to stem uncertainty. On Monday, Germany’s financial regulator froze SVB’s branch in the country.
Silicon Valley Bank Germany Branch will not be allowed to sell assets or make payments because it’s at risk of not being able to fulfill commitments to creditors, according to BaFin. The bank also has to close its client business.
The German operations don’t pose a danger to financial stability, BaFin said. The Frankfurt-based institution’s balance sheet amounted to €789.2 million ($846 million) at the end of last year and it doesn’t take deposits, according to the regulator.
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