The banking model in Europe and Spanish banking has nothing in common with that of SVB. The problems of the North American bank are confined to that entity and a very specific business model: that of a regional bank with a lighter level of regulation and supervision compared to national institutions.
SVB was negatively impacted in its assets (over 55% fixed income) and liabilities (funding) by the interest rate hike decided by the Fed. This differs from European banks, which have a high proportion of credit in their assets.
Strong and more volatile deposit withdrawals, concentrated among corporate clients in the technology sector with high cash consumption and limitations in funding rounds, in a world interconnected by social media, forced that bank to sell bonds at significant losses to cover these outflows, as a capital increase was not possible.
This bank was not subject to a regulatory framework to cover interest rate risk on its balance sheet, nor was it, unlike in Europe, obliged to comply with the demanding liquidity ratios of eurozone banks.
The European Systemic Risk Board had already warned a few months ago about the need to be prepared for the deterioration of economic activity and the instability of financial markets in a context of official interest rate normalization.
In line with that recommendation, Spanish banks have become very solid, possess a diversified and stable deposit base, are subject to strict supervision, and comply with demanding liquidity requirements.
José Luis Martínez Campuzano, spokesperson for the Spanish Banking Association
