The federal government does not want to compare the situation after the collapse of the Silicon Valley Bank (SVB) with the global financial crisis of 2008. “I don’t think we’re in a situation comparable to what we were then,” government spokesman Steffen Hebestreit said in Berlin on Monday. Chancellor Olaf Scholz (SPD) was informed about the situation at the SVB. But no further problems should be talked about now.
The Silicon Valley Bank (SVB) was closed on Friday after customers withdrew a lot of money in a short time. In the USA, attempts are being made to avoid contagion effects on other institutes. In Great Britain, a takeover for the local subsidiary was arranged at short notice, and in Germany a moratorium was imposed on the local branch.
“We are closely monitoring the current situation, together with BaFin and the Bundesbank,” said a spokesman for the Ministry of Finance. The Federal Financial Supervisory Authority (Bafin) is in charge. In addition, the Financial Stability Committee is also advising on the effects of the interest rate turnaround. The strong interest rate hikes in the US are considered to be one reason for the collapse of the SVB.
It had previously become known that Bafin had closed the German branch of the US institute. The Silicon Valley Bank Germany Branch based in Frankfurt/Main is to be closed to customers with immediate effect.
Because of “the existing risk for the fulfillment of obligations to creditors”, the Bafin issued a sale and payment ban on the bank. “The plight of the Silicon Valley Bank Germany Branch does not pose a threat to financial stability,” Bafin said.
The US money house Silicon Valley Bank, which specializes in start-up financing, has been temporarily closed and placed under state control after a failed emergency capital increase. This was announced by the US deposit insurance company FDIC on Friday. The SVB, founded in 1983, had seen immense withdrawals of funds in the days before as a result of liquidity concerns.
The bank has also been based in Germany since May 30, 2018 and conducts lending business in this country. According to Bafin, the bank does not collect deposits from customers in Germany, so the moratorium has “no consequences for deposit insurance in Germany”. According to Bafin, the total assets of the Frankfurt/Main-based institute amounted to EUR 789.2 million in the 2022 annual financial statements.
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