Silicon Valley Bank and Signature Bank were suspended after depositors began withdrawing funds from their accounts. The reason for this was poor reporting from the institutions, which reflected significant losses. This happened because of the hike in the Fed’s key rate. As a result, the assets of credit institutions, which previously only invested in government securities, depreciated and banks began to experience liquidity problems. Unlike the 2008 crisis, the US authorities this time decided not to bail out financial institutions or buy them out. They will limit themselves to trying to “meet the needs of customers”, that is, to give them access to deposits.
Many pundits are increasingly asserting that failed banks may soon be followed by others. In order to avoid a chain reaction, the US Federal Reserve launched a mechanism to provide banks with liquidity in the form of loans for up to one year. For these purposes, the US Treasury will allocate up to $25 billion from the stabilization fund. However, analysts wonder whether this measure will lead to a sharp rise in inflation, which will create additional problems. Additionally, many of SVB’s clients were technology companies in Silicon Valley. And now they face difficulties in their operations: access to accounts is blocked and there is no way to make payments, even for small amounts. The high risks of the spread of the financial crisis forced Joe Biden to intervene in the situation. In his speech, the president assured the people that he would work to support “the strength of the banking system and the continued recovery of the American economy.” Additionally, the White House promised to “punish those responsible” for the collapse. On the White House-hosted show, the US President said: ‘It’s important that taxpayers suffer no loss’
Bankrupt SVB paid too little attention to financial matters, but was very active in protecting ‘gender diversity’
As analysts watch what US leaders are doing, former US President Donald Trump warns that Biden’s policies will plunge the country into another Great Depression. And Trump’s son, Donald Trump Jr., ironically noted that the bankrupt SVB paid too little attention to financial matters. But he has been very active in protecting “gender diversity” and pushing the climate agenda.
The official representative of the Russian Foreign Ministry, Maria Zakharova, commenting on the situation with the failure of American banks, was skeptical about Washington’s policy to stop the crisis. “Every child can explain how the US authorities will ‘support the stability of the banking system’ with paper and paint,” she wrote on her Telegram channel. “They will print even more unsecured dollars, which will cause even more problems in the world.” .”
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Anton Tabakh, chief economist at Expert RA, notes that unlike the 2008 financial crisis, while the US authorities are acting quickly and decisively – in particular, they have introduced a comprehensive guarantee for deposits in this bank, they will most likely opt for full coverage of all deposits. “But there is certainly a risk of spread. In the event of a full-fledged crisis, the Russian economy will be affected by the fall of the world economy and, consequently, a drop in demand for Russian exports,” he said. said the economist. believes.
According to the associate professor of the Department of State and Municipal Finances of the Russian University of Economics. GV Plekhanov Meri Valishvili, the failure of American banks will hardly be able to affect the work of the Russian banking system. “A number of restrictions have in fact isolated national credit organizations not only from international financial resources, but also from potential crisis factors,” explains the expert.
Professor of the Financial University under the Government of the Russian Federation Alexander Ilyinsky points out that the bankruptcy of SVB, which collapsed in 48 hours, also shows that any cryptocurrency exchange or financial system can go bankrupt even more quickly, since these institutions do not even have sufficient liquidity, the necessary capital and deposit insurance. “In the portfolio of the Russian banking system and the reserves of the Bank of Russia, the share of US treasury bills is insignificant, which makes the probability of the financial crisis passing from the United States to Russia extremely low,” he said. he declared.
US Treasury to allocate $25 billion in loans to banks to maintain liquidity
According to Mikhail Zeltser, stock market expert at BCS Mir Investments, the impact on the Russian economy can now only be indirect. “If commodity prices fall, export-oriented countries will have less income. are turned away,” Zeltser said.
BitRiver financial analyst Vladislav Antonov draws attention to the fact that all the crises that later infected other countries started in the United States: the dot-com bubble of 2000, the mortgage crisis of 2008 (Lehman Brothers suffered unprecedented losses due to the current subprime mortgage crisis), Black Monday 1987. Nevertheless, in his opinion, the collapse of the banks will not affect the Russian economy and the banking system. “Russia is under sanctions and the share of the dollar and the euro in international settlements has decreased significantly,” explains the expert.
How effective the American measures to prevent the crisis were, time will tell, but so far the development of panic has been prevented, continues the head of the analytical department of BKF Bank Maxim Osadchy. “The current US deposit insurance system has shown its failure – it does not prevent depositors from showing up at banks and therefore needs to be reformed. As Russia increasingly isolates itself from the US financial system in Due to the sanctions, the impact of recent events in the US financial industry on the Russian financial system has proven to be insignificant. The ‘domino effect’ has not reached Russia from the US,” he said. -he.
Finam analyst Igor Dodonov notes that closed banks are relatively small and rather specific, therefore, in his opinion, the current situation will not turn into a full-fledged banking crisis, although it will create a certain negative background around the area in the coming weeks. “Currently, the Russian financial system is quite isolated from the world. Therefore, I do not expect any significant impact of the problems of the American banking sector on the economy and the banking sector of the Russian Federation”, agrees Dodonov with the experts.
Prepared by Gulnara Vakhitova
