No Systemic Risk from SVB Failure, but Watch Out for Areas of Vulnerability
No Systemic Risk from SVB Failure, but Watch Out for Areas of Vulnerability
Tuesday 14 March 2023
Investment Talks
No Systemic Risk from SVB Failure, but Watch Out for Areas of Vulnerability
March 2023 | The SVB bank failure is the third after Signature Bank and Silvergate Bank, and it is the largest bank failure since the 2008 financial crisis, with SVB being the 16th biggest US bank. The failure was mainly due to an asset-liability mismatch, which resulted in the materialization of losses from sales of quality bonds that were trading down amid rising yields over the last year.
01 | SVB bank failure is the third after Signature Bank and Silvergate Bank, and it is the largest bank failure since the 2008 financial crisis, with SVB being the 16th biggest US bank.
02 | We believe this is not a systemic risk: while being a negative for the market, the SVB failure is more of an idiosyncratic story rather than a systemic issue.
03 | While we believe the Fed will remain committed to fighting inflation, it will have also to assess the impact of the current crisis and its potential spillovers in its policy.
Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of March 14, 2023. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi US and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. Amundi Asset Management US is the US business of the Amundi Asset Management group of companies.
