China central bank warns SVB failure shows impact of rapid global interest rate hike – state media

A senior People’s Bank of China (PBOC) official said Saturday’s failure of Silicon Valley Bank (SVB) showed the rapid shift in monetary policy was having ripple effects, state-run Shanghai Securities News reported. reported.

People’s Bank of China Deputy Governor Xuan Changneng told the Global Asset Management Forum in Beijing that some financial institutions have become accustomed to operating their balance sheets in an environment of low interest rate volatility, so the short-term and lack sensitivity to long-term interest rates. Large fluctuations in rates.

The paper said that the characteristics of Silicon Valley Bank’s balance sheet made it more sensitive to changes in interest rates, ultimately leading to risks.

“Based on current conditions, there remains uncertainty as to whether inflation in major advanced economies will decline significantly in the near term, and maintaining relatively high interest rates is a major concern for banks and financial institutions. It may also have a negative impact on the operation of the system.”

SVB Financial Group on Friday sought protection under Chapter 11 of the U.S. Bankruptcy Code, days after its former division, Silicon Valley Bank, was acquired by U.S. regulators.