Making a statement about the impact of bank bankruptcies in the USA on the EU at the European Parliament (EP) General Assembly Session held in Strasbourg, EU Commission Financial Services Member Mairead McGuinness, in her statements, said, "These bank bankruptcies are caused by deficiencies in the management of their balance sheets" , "Interest rates "The change created a new environment", "High inflation and rising interest rates create different challenges for financial stability than long-term low interest rates," "We closely monitor the situation in the USA. The direct impact of this on the EU seems limited".
McGuinness evaluated the events as lessons to be learned by the banking sector. In particular, focusing on the bankruptcy of 3 US banks, Silicon Valley Bank (SVB), Signature Bank and Silvergate Bank, in the last few days, McGuiness stated that the bankruptcies were due to deficiencies in balance sheet management.
Reminding that SVB received serious corporate deposits during and after the epidemic, McGuinness stated that the bank invested a significant portion of these deposits in long-term fixed-rate assets. McGuinness stated that the bank later faced a deposit outflow, and the SVB had to sell long-term assets at a significant loss as interest rates rose. Emphasizing that this loss triggered more deposit outflows, McGuinness said that the bank could not raise capital and that the US authorities should step in. "SVB had a very limited presence in the EU," McGuinness said. Noting that they are in contact with banking supervisors, McGuinness said, "The direct impact of bank failures in the US on the EU appears to be limited."
McGuiness stated that SVB received high corporate deposits during and after the covid epidemic and invested a significant portion of the bank's deposits in long-term fixed-rate assets. He mentioned that the bank later faced a deposit outflow and had to sell long-term assets at a great loss as interest rates rose. He added that in the face of this situation, the bank could not increase its capital and as a result, the US authorities had to step in. "SVB had a very limited presence in the EU," McGuinness said. Drawing attention to the fact that they are in contact with the banking supervisory authorities, McGuinness evaluated the whole situation from a broad perspective, explaining that "the direct impact of bank bankruptcies in the USA on the EU appears to be limited".
McGuinness, in his continued statements, emphasized that there is no similarity between the SVB and EU banks. McGuinness; "This shows how the economic and financial situation has changed globally and in Europe", "The change in interest rates has created a new environment", "We must be vigilant against this new environment. High inflation and increasing interest rates long-term low interest rates in terms of financial stability. He expressed the general reaction of the EU to the events with the sentences "