China’s Central Bank gave an important statement on the sinking of SVB, the increase in interest rates became the reason for the crisis
China Central Bank on SVB Crisis: The banking crisis that started from America has now reached Europe. After the bankruptcy of America’s Silicon Valley Bank and Signature Bank, its effect is visible on Credit Suisse Bank of Switzerland. In such a situation, the central bank of China has given an important statement on this growing banking crisis in the world. Giving an official statement on this matter, the China Central Bank said that the main reason behind this current banking crisis is the increase in the interest rate. Significantly, in the last few months, many central banks of the world, including the Fed Reserve of America, have increased their interest rates rapidly. In such a situation, People’s Bank of China’s deputy governor Juan Changneng said that its impact has been more on some financial institutions.
The reason for the bank crisis is the continuous increase in interest rates.
According to the report published in Economic Times, Xuan Changneng said that in the last few years, many banks and institutions are working only on low interest rates. In such a situation, he has now become accustomed to it. In such a situation, due to monetary strictness, there is a lack of foresight in those institutions. Regarding Silicon Valley Bank, he said that due to the high increase in interest rates, the balance sheet of the bank was badly affected. This has become an important reason for the sinking of the bank.
New threats to the global economy
Along with this, Juan also said that the interest rate rates continuously increased by the central banks in the recent past have created new threats to the global economy. There is still uncertainty about inflation in countries, but the continuous increase in interest rates has put the global economy at risk. In such a situation, due to the monetary policy, many big banks of the world have faced financial difficulties.
Banking crisis had a bad effect on the global market
There has been a stir in the financial market since the bankruptcy of America’s Silicon Valley Bank and Signature Bank. Since then, uneasiness is also being seen in the customers of American Bank’s joint venture based in China. In such a situation, in order to restore the confidence of the customers in the banking system, the bank has issued a statement saying that its business is completely independent and there is no threat to the money of the customers.
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