SVB collapse not 'significant risk' to Europe: EU economy chief

The EU’s economy commissioner said Monday (Mar 13) that the collapse of Silicon Valley Bank in the United States did not pose a serious threat to Europe, amid investor fears of contagion throughout the financial sector.

“The possibility of indirect impact is something that we have to monitor but, at the moment, we don’t see it as a significant risk,” Paolo Gentiloni told reporters in Brussels as European stocks fell sharply in afternoon trading.

He said an impact of SVB’s demise on global markets was “predictable” but added, “this is one thing; assessing the fact that there is a real risk of contagion is a different thing”.

“I don’t think we have a real risk of contagion at the moment in Europe,” he said.

Gentiloni added that the European Union was “monitoring the situation in close contact” with the European Central Bank.

SVB, a key lender to start-ups across the United States since the 1980s, collapsed after a sudden run on deposits, prompting regulators to seize control on Friday.

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Two of the EU’s largest economies, France and Germany, said earlier Monday that there were no risks to their financial systems from the collapse. AFP