On the occasion of today’s debate in the European Parliament in Strasbourg on the Silicon Valley Bank and the stability of the European financial system, Henrike Hahn, Bavarian member of the European Parliament (The Greens/EFA), deputy member of the Economic and Monetary Committee and deputy speaker of the German delegation of the Greens, comments:
“The bank failures in the US are a warning shot for us in Europe - we urgently need a more targeted EU banking reform. The latest roll back of EU financial legislation is taking a too big risk for the stability of the European financial system - the lack of an exact implementation of the Basel III agreement still remains an open flank.
The review of the crisis management and deposit insurance framework dealing precisely with medium-sized banks such as the Silicon Valley Bank must now be urgently pursued. The EU - in contrast to the US - still has no EU-wide deposit insurance scheme due to the blockade in the Council of Ministers - this needs to change as soon as possible.
We are just now seeing again that rapid interest rate hikes - leading among other things to the collapse of the Silicon Valley Bank - have to be considered carefully because of their potential risks for the financial system. The European financial sector is also vulnerable to interest rate risks as we found out on the occasion of the mini-financial crisis of UK pension funds last October.
It is evident that solid capital requirements for banks, a strong banking supervision and an appropriately financed resolution regime and deposit insurance scheme are needed to prevent that taxpayers' money is used to bail out banks and their depositors. We urgently need a solid EU financial policy that does not dive deeply into European citizens’ wallet.“
I would be happy to answer any further questions.