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Bank failure: the risk of contagion to Europe is limited according to Moody's

2023-03-14T16:30:38.851Z


The US banking sector has been disrupted since the collapse of Silicon Valley Bank (SVB). The disruptions experienced by the American banking sector following the bankruptcy of Silicon Valley Bank (SVB) should have a limited impact on European establishments, organized differently, according to a note published Tuesday by the American rating agency Moody's. " The balance sheet structure of European banks limits contagion ," says Moody's, which has also lowered the outlook for the US ba


The disruptions experienced by the American banking sector following the bankruptcy of Silicon Valley Bank (SVB) should have a limited impact on European establishments, organized differently, according to a note published Tuesday by the American rating agency Moody's.

"

The balance sheet structure of European banks limits contagion

," says Moody's, which has also lowered the outlook for the US banking sector from stable to negative.

To justify its position, the agency cites a higher proportion of central bank deposits from European banks.

Conversely, debt securities represent only 12% of the balance sheet of banks in the euro zone, against 30% for US banks.

"

Deposits are probably more stable in Europe, their growth having been less rapid

", also underlines Moody's.

Finally, the Bank of England and the European Central Bank have better developed access to liquidity in the event of tensions, according to the rating agency.

Since the beginning of the week, the European authorities have multiplied the statements intended to be reassuring.

"

There is no direct contagion and the possibility of an indirect impact is something we need to monitor but at the moment we do not see a significant risk

," EU Economy Commissioner Paolo said on Monday. Gentiloni in Brussels ahead of a meeting of euro zone finance ministers.

A spokeswoman for the Banque de France had for her part indicated that French banks "

are not exposed

" to the bankrupt American bank, a few hours after Bruno Le Maire had assured that he saw no risk of contagion .

Source: lefigaro

All news articles on 2023-03-14

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