So far, it appears that the takeover of Silicon Valley Bank is all about the problems of a single bank.
14:55•Updated 14:56
Finnish banks are also closely monitoring the situation of US-based Silicon Valley Bank, which ran into difficulties. The US banking authority has announced that it will take over a bank that is suffering from deposit flight and is known as a financier of growth and technology companies in Silicon Valley.
– After all, this is a significant event, because it is probably the 18th largest bank in the United States and probably the second largest bank, which is going upside down in the United States, says Finanssiala’s CEO Arno Ahosniemi.
Effects have also come to Finland in the form of market reactions.
– This has an impact on the market, but I don’t see a direct impact on the Finnish financial industry. Apart from the fact that, of course, on Friday the stock prices of Finnish bank stocks were also down in Helsinki.
The starting shot for a new financial crisis?
The takeover of Silicon Valley Bank brings to mind the events of the 2008 financial crisis. Are there any sparks for an equally extensive and boring chain of events?
– It is quite premature to say. In addition to that [finanssikriisin] quite a lot of measures have been taken since then, which have increased the solvency of financial operators, Ahosniemi reminds.
On the other hand, the rise in interest rates is also affecting the background.
– Smaller banks are not able to sell their bonds very quickly, the yield of which has weakened greatly due to the rise in interest rates. And if customers simultaneously want to withdraw deposits from these banks, then the banks are in trouble. It is possible that smaller banks in the United States may still have more problems, Ahosniemi estimates.
In itself, the interference of the authorities in the bank’s operations is not at all unusual.
“Reasonable action when the risks are under control”
– During the financial crisis, there was a threat of a situation where financial market players did not trust each other. The entire financial system, the economy’s blood flow, threatened to stop. In order to prevent such a situation, the authorities intervene and must do so if serious problems arise, Ahosniemi emphasizes.
Traditionally, business financing in the United States has been more stock market-oriented than bank-oriented.
– Regarding the financing of growth companies, the situation in Silicon Valley has been that the risk level has been considered to have increased and more attention has been paid to the profitability of the companies than to the growth.
But is financing growth companies in general too risky for banks?
– Banks do it in Finland as well, and it’s a perfectly reasonable thing to do when the risks are under control. And yes, it is a good way to finance, says Ahosniemi.
In 2008, the global financial crisis hit the lives of Finns: