There is no contagion effect on the Indian banking sector. But there sure are learnings for the Indian private investors - whose investments have shaped Indian startups - to keep their treasury operations well-run and diversified. They should not be swayed by the greed of a higher interest rate to put all their deposits into one single entity.
The lesson for Indian financial institutions is simple. They should improve their risk management framework and have real-time analysis of the Asset Liability Management (ALM). With every interest rate swing, the ALM needs reinforcement. Here is where the Reserve Bank of India’s (RBI’s) abundant caution and perceived-intrusive-regulations and supervision becomes useful.
US Bank Failure
The Silicon Valley Bank had been in business for forty years and had been a banker of first choice for technology firms and the venture capital industry. It was the Silicon Valley’s largest bank by deposits, just before its collapse and held assets worth $209 billion and deposits of $175 billion. In US history, this is the second-largest bank failure, and the first blow-up after the 2008 Global Financial Crisis (GFC). The Silicon Valley Bank was not large enough to be ranked as a systemically important financial institution (SIFI) in the US. For India bank watchers, only SBI, HDFC bank and ICICI bank are in SIFI league from a banking perspective.
The Silicon Valley Bank held excellent assets, such as US Treasury and government-backed mortgage securities, which are safe bets. But when the Fed aggressively increased interest rates, the value of the SVB holdings reduced drastically.
この記事は Business World India の 8 April 2023 版に掲載されています。
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この記事は Business World India の 8 April 2023 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
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