Europe’s financial regulators are furious with the US response to the Silicon Valley bank collapse and have privately accused Washington of breaking the “rules for dealing with bank failures” they helped craft.
The Financial Times reported that while regulators have not formally expressed their disapproval of the US move, some senior officials in Europe are angry over the decision to protect all depositors at the collapsed bank and fear it will undermine the agreed order. Worldwide.
The newspaper quoted a senior eurozone official as saying they were shocked by the “complete and utter impotence” of the US authorities, after a decade and a half of “long and tedious” meetings between the two parties during which the Americans advocated for the end of the bailouts
European regulators are particularly angry that US authorities have violated the $250,000 deposit protection rule, arguing that it is an exception due to “systemic risk”.
This despite Washington’s assertion that California-based lender Silicon Valley Bank was too small to be subject to rules aimed at preventing a repeat of the 2008 global financial crisis.
A French political expert told the newspaper: “This is the US version of the small Venetian banks (which collapsed centuries ago due to lack of regulation and lack of liquidity),” pointing to earlier US criticism of the handling of Europe from the Italian “Monte dei Paschi”. ” crisis.
