Marcel explained that Silicon Valley Bank is not subject to US Basel III regulations due to its size. “Here in Chile, these rules apply to all banks in the market, in accordance with the new General Banking Law,” he explained, thus excluding the risk of the region facing bankruptcy of California entities.
Minister of Finance, Mario Marcel ruled out the bankruptcy of Silicon Valley Bank (SVB) Effective locally.
The collapse of the California Regional Bank has unleashed a financial turmoil in the United States. Its impact is still being felt on Wall Street, especially among small businesses. At the moment, he is the only one at the New Yorker Bank. signature bank is affected.
Investors have started selling shares because they fear that other banks, especially those exposed to the same type of customers (startups), will suffer sudden outflows of unmanageable deposits. .
Faced with this scenario, Minister Marcel said after commitments with large companies grouped in the Coalition of Production and Trade (CPC) that “fortunately there is no risk of this kind” due to the regulatory framework. claimed.
“Silicon Valley Bank, in particular, was a non-Basel III bank in the United States because of its size. Here in Chile, these regulations apply to all banks in the market, according to the new General Banking Law, so fortunately there is no risk of this kind. ” he explained.
The tax commissioner said the regulations “give us a lot of peace of mind” as a result.
To meet the liquidity needs of the companies it serves, SVB sold immature government bonds for $21 billion. It tried to make up for the $1.8 billion loss with a capital increase.
But after the announcement of the move, the company’s stock price plunged 60% on Thursday, derailing its fundraising efforts. Many clients withdrew their funds, deepening the title drop On Friday, it led authorities to intervene at the entity to prevent the situation from escalating.
