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Discussing the Causes and Risks of Silicon Valley Bank’s Bankruptcy with a Chinese Expert

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Zhou Ming, deputy director of the China Center for International Economic Exchanges, said the failure of a Silicon Valley bank is associated with serious systemic risks that will affect the US and the global financial system.

Speaking at the opening of the China Development Forum in Beijing, the expert added: “We all witnessed the failure of the Silicon Valley bank two weeks ago. I think the reason lies in systemic risks. By itself, it is a systemic danger.” , but the nature of its collapse is like this.”

According to the expert, the reason that led to the bankruptcy of the bank is very simple – incompetent management in the banking sector, imbalance in the banking structure, inefficient risk management.

“But more important is the backdrop against which this is happening. We are seeing the longest period of monetary easing and fiscal stimulus in 15 years. We are seeing the fastest rate increase in history, by 500 basis points in the last 12 months. I don’t think that” Someone in the financial sector has seen something like this before, but it all has consequences.”

Source: News

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