ECONOMIC UNCERTAINTY committee met frequently in the lead-up to the collapse , suggesting they knew they were treading along a dangerous path for quite some time .”
While a failure of corporate governance may suggest recent bank collapses are isolated incidents , Professor at King ’ s Business School and Director of the Qatar Centre for Global Banking & Finance , David Aikman , feels SVB ’ s collapse is a significant “ warning sign for the future ”.
He notes : “ The problems that led to the downfall of SVB bank in the United States and similar institutions persist . Despite their large size , these US banks were not subject to the stress testing rules and the strictest capital and liquidity requirements , and they consequently remain vulnerable to the impact of higher interest rates .”
While this may suggest banking issues are “ more regional ( US ) rather than global ”, as claimed by Synpulse ’ s Managing Director Marouane Bakhtar , Aikman notes that Europe is facing highly stretched housing markets , in addition to risks in the commercial real estate sector .
“ Many European banks operate with wafer-thin capital ratios supporting their housing market exposures , so the degree of resilience to these losses is not that great ,”
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