Irish impact of SVB collapse must be assessed to inform action and prevent further cost - Pearse Doherty TD
Sinn Féin spokesperson on Finance, Pearse Doherty TD, has welcomed today’s meeting of the Financial Stability Group to assess the domestic impact of the collapse of Silicon Valley Bank.
Speaking today, Teachta Doherty said:
“I welcome today’s meeting of the Financial Stability Group following the collapse of Silicon Valley Bank in the United States.
“It is important that an assessment is undertaken to establish the economic impact of SVB’s collapse on the technology and life sciences sectors.
“We know that SVB has had Irish customers since 2012 through lending and equity investment, but also those who held deposits with the bank.
“The impact will vary across companies – for example Irish companies that relied on SVB for working capital will require new sources of funding.
“It is important that the full picture of the impact for Irish customers is understood.
“Beyond that, it is vital that these developments do not have wider repercussions for our own financial system – in the first instance that begins with the action being taken by the U.S. authorities.
“It appears that SVB was particularly exposed to interest rate hikes as a result of the composition of its balance sheet.
“It is therefore important that the Central Bank, as regulator, both assesses the impact of SVB’s collapse on our own economy and monitors our own system to ensure similar risks do not develop.
“Today I have written to the Central Bank to underline these concerns.
“More broadly, these events underline the importance of rigorous and intrusive regulation in the financial sector.
“We know all too well the consequences of financial mismanagement and contagion – it cannot be allowed to happen again.”