G20 watchdog to study Silicon Valley Bank, Credit Suisse turmoil | Inquirer Business

G20 watchdog to study Silicon Valley Bank, Credit Suisse turmoil

/ 05:39 PM June 01, 2023

LONDON  – How rules are applied to banks and the calculation of their liquidity buffers should be reviewed following recent turmoil in the banking sector, Klaas Knot, chair of the G20’s Financial Stability Board said on Thursday.

The fallout from the collapse of Silicon Valley Bank, a U.S. bank that U.S. regulators did not deem to be “systemic” and therefore required to comply with more onerous liquidity rules, was felt in Europe.

In Switzerland, the government forced a takeover of ailing Credit Suisse by UBS, rather than closing it down using “resolution” tools regulators introduced after the 2008 global financial crisis.

ADVERTISEMENT

Knot, who also heads the Dutch central bank, said the FSB has begun evaluating how the U.S. and Swiss authorities responded to these events.

FEATURED STORIES

Regulators should reconsider which type of banks are deemed to be systemically important and therefore come under global “Basel III” capital standards, Knot said.

“It’s not a European issue, but it is an issue in other parts of the world.” Knot told an event held by the European Banking Federation.

ADVERTISEMENT

“Supervision on our side has clearly stood up better than on the other side of the Atlantic.”

It was also time to reconsider the liquidity coverage ratio, a buffer of cash and other liquid instruments banks are required to hold to cope with short term funding squeezes, Knot said.

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

TAGS: Banking, G20, review, watchdog

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our business news

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2023 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.